Investment Banking und Aktienkultur

Summary

In the past, equities as an investment and financing vehicle were only of minor importance in Germany. However, there are signs that a fundamental change towards a new equity culture is under way which should lead to new business opportunities for investment banks as well as to new risk capital for the “Mittelstand”. A driving force behind this trend is Germany’s ambitious privatisation program starting with Deutsche Telekom’s IPO at the end of 1996. As in other countries, it should be used to attract large parts of the German population to become shareholders. Personal equity plans should be introduced as an incentive for a long-term investment in shares.

Increasingly, German companies are embracing the shareholder value principle as a management guideline. These efforts should be supported by relaxing the legal restrictions on share repurchase programs as well as stock option programs for the management. To enhance the equity base of small- and medium-sized companies the market for these shares needs more liquidity and transparency. For this reason the SMC-market should be made more attractive for both institutional investors and intermediaries, e.g. by lowering present investment limits or by admitting “specialists” to the stock exchange.