You might think that share prices would take a hit if talks to form a government break down in acrimony, heralding months of political limbo. But on Monday, November 20, the day after the Free Democrats pulled the plug on coalition talks with Chancellor Angela Merkel, Germany’s top bourse barometer, the DAX, just kept on rising.
There’s a simple reason why – the earnings and dividends of the 30 blue-chip stocks listed in the DAX are surging to record highs this year. Global growth is firing on all cylinders and that’s offsetting fears about political uncertainty at home. According to Handelsblatt estimates, DAX company dividend payouts for 2017 will reach a total of €35 billion ($41.8 billion), the biggest payout ever in German corporate history, up €4 billion, or 12 percent, from the year before.