By Scott Kanowsky
Investing.com -- Shares in Commerzbank AG (ETR:CBKG) rose on Monday after the German lender re-entered the DAX index, replacing chemicals giant Linde (ETR:LINI).
Commerzbank is rejoining the exclusive club of Germany's blue-chip firms for the first time since 2018, when it was taken off the index to make way for payments processor Wirecard.
Since that time, the second-biggest bank in Germany has undergone a sweeping overhaul of its operations that saw thousands of jobs cut and branches shuttered in a bid to boost profits. Earlier this month, Commerzbank reported its highest annual net income in over a decade and said it expects to see an improvement to that result in 2023.
Meanwhile, Wirecard filed for insolvency in 2020 following revelations that it had been operating a multi-year fraud that had left a hole in its accounts worth nearly €2 billion (€1 = $1.0562). In the wake of the scandal, DAX-compiler Deutsche Boerse (ETR:DB1Gn) expanded the index to include 40 companies instead of 30 and made membership rules stricter.
Founded in 1988 as a German response to the FTSE in the U.K. or the Dow Jones Industrial Average in the U.S., the DAX features some of the most historic corporate names in Europe's largest economy, including Volkswagen AG (ETR:VOWG_p), Allianz SE (ETR:ALVG), and Adidas AG (ETR:ADSGN).
Linde - until recently, the DAX's largest member by market value - announced in October that it would delist from the Frankfurt stock exchange. The maker of industrial gases said it will form a new holding company (NYSE:LIN) to trade on the New York Stock Exchange, arguing that the DAX had weighed on its valuation.