On the second attempt, it worked. In March 2024, Stoxx will raise the cap limits of the Dax, Mdax, Sdax, and TecDax indices from 10% to 15%. The index subsidiary of Deutsche Börse is responding to the overwhelming majority of issuers' wishes. Over 90% of surveyed corporates expressed support for the increase. For good reason: the 10% cap has been a real handicap.

This goes for individual companies like SAP. But it also goes for the German stock market as a whole. The former heavyweight Linde abandoned its listing on the Frankfurt Stock Exchange and left the Dax for good - at least partially because of the cap limit. And the decision paid off for Linde. Just a few days ago, the shares reached an all-time high. It is all the more surprising that only about half of the financial institutions have agreed to raising the cap limit. Apparently, personal motives weighed heavier than the goal of improving the fundamental attractiveness of the local stock market.

Some critics from the fund industry may argue that SAP has still performed strongly with the cap limit. Indeed, the market capitalization of the software company from Walldorf has risen by almost 50% to 166 billion euros since the beginning of the year. This is enormous. However, the company is pretty much at the end of the road in the DAX. The current index weight of 10.67% is already beyond the current cap limit.

The potential of Europe's largest software house is most likely higher than that. The cloud competitor Salesforce currently has a market value of around 200 billion euros. The second major competitor, Oracle, even reaches 292 billion euros. If SAP could catch up in valuation with its arch-rival, the company would already be breaking the new cap limit.

This is why it is welcome that the exchange wants to interpret the intra-quarterly cap limit of 20% somewhat more generously. This allows for temporary fluctuations, which are common in the tech sector. The hype around generative artificial intelligence has lifted Microsoft's stock to a completely different level. The stock, which traded at just under $230 in January, now costs almost $380. In terms of market value, the US company is very close to its arch rival Apple again.

However, the new cap limit on the German stock market will not allow for a similarly astronomical valuation. The fundamental handicap therefore persists. At least it is has been mitigated somewhat.