How does the value of stocks change?

What will change for stocks and bonds?

Since January 4, 1999, shares have been quoted exclusively in euros on the German stock exchanges

When converting shares, stock corporations can basically choose between two options:

1. The change in the nominal value of the shares:
The shares must be converted to even nominal values ​​in euros. The new nominal amount of shares must be 1 euro or a multiple thereof. A capital measure is required to smooth out the nominal amounts (capital increase, capital reduction or reallocation of the share capital).

2. The conversion to no-par shares:
The no-par share represents a portion of the share capital of the AG. The nominal value is no longer printed on the share certificate. There is a clear trend towards the introduction of no-par shares among German stock corporations.

The custodian bank provides information on all important details about the euro changeover. It carries out the necessary measures for the account holder.

Share certificates

DM share certificates became "incorrect in content" as a result of the conversion to the euro or the conversion into no-par shares. Whether the shareholder has to exchange his deeds depends on the one hand on the design of the respective deed and on the other hand on whether the AG has divided its capital into par value shares or individual shares.

Conversion of certificates for no-par shares:
Documents stating the nominal value can still be used. The DM information is not taken into account any further. Documents stating the number of securitized shares can also continue to be used. Certificates that indicate the nominal value and the number of securitized shares at the same time must be exchanged.

Conversion of certificates for par value shares:
Stock corporations that do not convert to no-par shares must issue new certificates that indicate the nominal value in euros. There is also the possibility that the AG completely waives the issue of actual shares (share certificates). For this purpose, the general meeting must resolve that the right of the shareholder to individual certification of the shares is excluded. The legal prerequisite for this was created by the law on control and transparency in the corporate sector (KonTraG).

Stock market indices
Deutsche Börse AG has been calculating the German DAX share index since 4.1.1999 in euros. Since both the current rate (numerator) and the closing rate from 12/30/98 (denominator) are converted into euros in the DAX formula, the course of the curve remains unaffected. The point values ​​of the DAX do not change.

All listed government bonds - federal bonds, federal bonds, federal treasury notes - which are due after January 20, 1999, were converted to euros on January 1, 1999. The securities that were not traded on the stock exchange, i.e. federal treasury bonds and federal treasury funds, were excluded from the changeover.

Since January 1999, new federal issues listed on the stock exchange have only been issued in euros. Federal Treasury Bills and Federal Treasury Treasuries continued to be issued in DM until December 31, 2001.

The conversion of German bonds takes place according to the so-called "1 cent method". Thereafter, the customer's portfolio is converted to euros using the irrevocable exchange rate. The smallest tradable unit for German bonds is 1 cent. This denomination makes it possible to trade even "crooked" amounts. The customer can smooth out his portfolio position by buying or selling. A re-stamping or reprinting of the annuity papers is not necessary during the changeover.

Investment funds
The majority of investment companies will calculate their share prices exclusively in euros. Since January 4, 1999, the issue and redemption prices determined on a daily basis have only been published in euros. The distributions will also be made in euros. Investors can still purchase fund units in DM up to 2002.

Option: Exchange futures transaction with the right to buy or sell a good at a previously agreed price within a specified future period (option period). The goods on which the option is based are primarily stocks or bonds. Options on currencies, interest rates or stock indices are also traded.

Due to the conversion of the stock exchange listings to the euro on January 4, 1999, an adjustment of the options is necessary. With the exception of the runtime, all conditions must be adjusted. The conversion is purely mathematical and technical.

Stock options:
The DM base prices are converted to euros using the irrevocable exchange rate. The warrants will then continue to be traded with a "crooked" underlying until the respective expiry date. New option series will be introduced with smooth base prices denominated in euros. In the case of stock options denominated in a non-participating currency, the strike prices and subscription ratios remain unchanged.

Index options:
An adjustment of Dax warrants is not necessary because the Dax will be continued at the same level. The DM base price becomes a euro base price. In addition, the subscription ratio is adjusted: This ratio is multiplied by the conversion factor. The price and the value when the option is exercised are calculated in euros.

Currency options:
With the irrevocable fixing of the exchange rates between the euro-participating countries, options on their currencies are completely superfluous. Such warrants can no longer be found on the price lists of German stock exchanges.