multiple funds may consider divesting from Linde, according to a prominent investment manager's statement.
Hey there! Let's dive into the Linde situation.
Arne Rautenberg, a fund manager at Union Investment, spills the beans on why many funds are throwing away their Linde shares. Union Investment itself has invested a whopping 2.2 billion euros in Linde. Need a quick rundown? Here's a lowdown:
Boerse Online - The bling of the DAX, Linde, is bouncing out of Frankfurt for Wall Street. What's the scoop on the share?
Arne Rautenberg: In the short term, this might not be so swell for the share price. Many equity funds hitch a ride on Linde due to thebiggist DAX company rule. We reckon around ten percent of shareholders will dump the shares post-delisting because of this saucy little reason.
Will Union Investment, too?
You betcha! Just like our pals, we're gonna reduce our stakes in our Eurozone and Germany funds.
What's your thoughts on Linde's move?
Linde wouldn't throw a HOO-rag.party for delisting if they weren't in the big leagues. The merger with Praxair knocked Linde way out of the ballpark, making it more valuable than its DAX mates. This little dance between Linde and the ten percent limit (caps the index weight for individual DAX stock) was getting a bit too rowdy. FYI, we're not hatin' on Linde, but dang, it's time for other German firms to step up their game.
What's the ten percent limit deal?
When a share in the DAX went beyond the maximum 10%, investors had to sell. Linde wants to stop that structural selling pressure, and that's a-okay for shareholders and shareholder value. Linde already runs with the big dogs in the S&P 500, where there ain't no cap.
Yeah, but the delistin' is gonna cramp the share, right?
Only in the short term. Linde might up its buyback program, and that negative price impact will be manageable. The share should bounce back quicker than a sneaky kangaroo.
** wanna know more?**
- Liquidity and Investor Base: Linde's new title in Wall Street might boost liquidity and snag some bigshot investors, which could prop up the share price.
- Currency and Index Effects: Going primetime in the States might fling the stock's currency to USD, posing forex risks for poor-man's Euro investor boys like us. Dropping from European indices could trigger dumping from lazy-pants passive funds.
- Regulatory and Cost Factors: Stricter U.S. paperwork (Sec filings) could boost compliance costs, whackin' margins.
- Shareholder Considerations: Frankfurt listed shares might transform into ADRs (American Depositary Receipts), possibly involving fees or administrational steps.
- Valuation Arbitrage: Dual listings often wipe out price discrepancies between markets, makin' valuations more in line with U.S. peers.
- Tax Implications: Dividend taxes or capital gains reporting could change under the U.S. system.
- Arne Rautenberg, a fund manager at Union Investment, predicts that ten percent of Linde shareholders will sell their shares following delisting due to the biggest DAX company rule.
- Union Investment, like other funds, plans to reduce its stakes in its Eurozone and Germany funds, similar to what many other funds are doing with their Linde shares.
- Arne Rautenberg suggests that Linde's move to delist from the DAX and join the S&P 500 is a sign that the company is now more valuable than its DAX peers.
- Linde aims to stop structural selling pressure by moving to the S&P 500, where there is no cap on individual stock index weight, and reducing the ten percent limit in the DAX.
