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Epcos to grasp Dax slot
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February 9, 2000: 8:26 a.m. ET
German tech firm to replace Mannesmann in Frankfurt's blue-chip index
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LONDON (CNNfn) - Shareholders in Epcos, the surging German technology stock, had even more to celebrate Wednesday when their company was chosen to replace Mannesmann in Germany's benchmark Xetra Dax index.
Epcos stock rocketed 22 percent higher in Frankfurt Wednesday, as Deutsche Boerse confirmed the components manufacturer will fill the slot previously taken by the telecom provider.
Having surrendered to Britain's Vodafone AirTouch (VOD) in a hard-fought takeover battle worth $177 billion, Mannesmann (FMMN) also gave up its place in the blue-chip index, since only companies based in Germany -- the new Vodafone/Mannesmann will be London-based -- can be part of the Dax index.
That's good news for Epcos (FEPC), which was offered on the stock market late last year and then saw its shares rise 140 percent prior to the latest surge Wednesday. At its current price of 150 euros, the company is valued at 9.3 billion euros ($9.1 billion).
Epcos makes electronic components such as filters for customers including Nokia, Siemens (FSIE) and Philips. The booming market for cellular handsets has benefited the company, and 40 percent of its products go to the telecom industry.
The firm began life as a joint venture between Siemens and Japan's Matsushita, and following last year's IPO both companies retain 12.5 percent stakes in the firm.
"There's been a complete re-rating of technology stocks," said analyst Peter Knox of Commerzbank, explaining the rise in the stock price from the 31 euro level at which it was listed in October in Frankfurt and New York. Knox, who has a "buy" recommendation on the stock, said the company's high-tech products are well positioned to take advantage of the trend toward more high-tech handsets, and its traditional component business is benefiting from the general economic uptick in Germany.
Epcos will enter the Dax index as soon as Vodafone confirms it has received more than 50 percent of the shares in Mannesmann, and that could be as early as the end of this week. 
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Epcos
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