FRANKFURT/NEW YORK (dpa-AFX) - Following a strong rally in recent months, Hochtief shares are on the verge of being promoted to the DAX, according to an index expert. Pankaj Gupta of JPMorgan identified Lufthansa as a second candidate for a return to the blue-chip index, as he did three months ago. The airline had been a DAX member for over 30 years before losing its spot in 2020 due to the impact of the Covid-19 pandemic.

As Gupta noted based on closing prices as of May 21, the rules for 'fast entry' could apply in both cases. These are based on free-float market capitalization rankings. According to Gupta, as of May 21, Hochtief stood just above the required rank of 33, while Lufthansa was slightly below. The expert named online retailer Zalando and the VW holding company Porsche SE as potential candidates for demotion.

The expert also expects further changes in the indices below the DAX. In the MDAX, Gupta anticipates that Suss Microtec will move up from the SDAX to displace Redcare Pharmacy.

ISS Stoxx, a subsidiary of Deutsche Börse, reviews the DAX family indices (DAX, MDAX, SDAX, and TecDAX) on a quarterly basis. The next review is scheduled for Wednesday, June 3. Any changes will take effect on Monday, June 22.

Index changes are particularly significant for funds that physically replicate indices. These funds must rebalance and reweight accordingly, which can impact share prices./tih/gl/stk