market letter

Oldenburg (www.aktiencheck.de) – When the British left the EU, it must have been clear that London, as the leading financial center, would “have to lose its feathers”, according to the experts from LOYS.

And so it is no surprise that although London is still the largest financial center in Europe, it has lost some business to the continent. There is no doubt that Amsterdam, Frankfurt, and Dublin in particular, but Paris would have benefited the most from the Brexit decision.

The French capital has recorded the lion’s share of the emigration from London. Above all, the large American investment banks have chosen Paris as their most important trading center on the mainland. With the political will to do so, the most important German financial center – Frankfurt am Main – could have risen to become the leader on the continent. Clearly, Paris was much more committed to attracting London banks.

President Emmanuel Macron, who is currently under strong criticism, has declared it a top priority to make the French capital attractive to foreign banks as a location. This is not surprising, since the highly educated French President, who came from a good family, gained relevant experience in the investment business as a partner at Rothschild & Co. He also served his country as economics minister under President François Hollande.

If German officials had campaigned for Frankfurt with the same verve as Macron had for Paris, by far the largest economy in Europe could experience a post-Brexit boom in the financial sector. But in German politics there is a lack of elementary knowledge about the importance of financial markets and one cannot avoid the impression that there are ideological aversions to the money sector. However, this overlooks the fact that prosperity is always a function of flourishing financial markets.

It is by no means a coincidence that countries with strong financial sectors (USA, Great Britain, Singapore, Switzerland, Dubai) rank very favorably in the prosperity statistics. What’s more, the financial sector is not a low-wage sector and can be seen as climate-friendly. In addition, competition from China is not a danger, as is the case in manufacturing industries.

The strong role that Paris is now playing on the financial markets is also reflected in the stock markets. It may surprise some readers, but the French stock market is significantly more valuable than the German stock market, although the German economy is a good third larger than that of France.

The French stock market heavyweights alone LVMH (ISIN FR0000121014/ WKN 853292), Hermès (ISIN FR0000052292/ WKN 886670) and L’Oréal (ISIN FR0000120321/ WKN 853888) would make up the German top 3 (SAP (ISIN DE0007164600/ WKN 716460), Siemens (ISIN DE0007236101/ WKN 723610) and Deutsche Telekom (ISIN DE0005557508/ WKN 555750) by far, especially since Germany’s most valuable company to date, Linde PLC (ISIN IE000S9YS762/ WKN A3D7VW). turned my back.

LVMH alone is worth about as much on the stock exchanges as the four largest German companies together. This finding once again shows the poor share culture and the political disinterest in it. It would be wiser for the prosperity of the citizens to prioritize the question of what can be done to enable the population to participate in the prosperity machine of the financial market.

Britain has done its financial industry a disservice with Brexit. With their constructive attitude, France’s leadership had succeeded in attracting large commercial departments from the Thames to the Seine.

In the past few months, German politicians have had to learn ignominiously that other countries have more realistic assessments (Russia, defence, energy, migration, China, etc.) of the actual situation. It is to be feared that this will also be the case in the area of ​​the financial markets. (05/11/2023/ac/a/m)