The only notable listed company from Saxony-Anhalt, United Bioenergy, or Verbio for short, has organic in its name. 36 years after German unification, it is the only entrepreneurial idea from the country that stock market investors predict a reasonable future and trust with their money; founded and still run by Claus Sauter, who comes from a Bavarian agricultural trading family.
Verbio is listed in the S-Dax and currently has a market value of two billion euros. Once only Q-Cells, the solar company founded by West Berliners and the British and based in Thalheim in Saxony-Anhalt due to attractive subsidies, managed to achieve higher, but then went into insolvency just like the third, somewhat better-known stock market stock from Saxony-Anhalt, Mitteldeutsche Fahrradwerke Mifa.
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Saxony-Anhalt is therefore a stock market desert. No wonder that there were no extraordinary price reactions on the stock market the day after the state election. The Dax was slightly down by 26,000 points in the morning. Verbio gained a good one percent in price. The lack of capital markets in Saxony-Anhalt is one of the country's problems. Corporate headquarters bring jobs and tax revenue. There is a lack of entrepreneurial spirit, entrepreneurial courage and successful implementation.
Hardly any economic significance
However, this is not a unique feature of Saxony-Anhalt. The SpaceX, Anthropics and SK Hynix of this world were not created in Baden-Württemberg or North Rhine-Westphalia.
The fact that the stock market reacts calmly to the AfD's election success is also due to the low importance of state politics. It doesn't really have much of a short-term economic impact. In addition, Saxony-Anhalt accounts for less than three percent of Germany's population and an even smaller share of economic output.
After the election, the analysis departments of the banks and asset managers therefore commented less on what would happen next in Saxony-Anhalt, but rather with a view to Berlin politics. Most people assume that nervousness in federal politics is increasing, but they hope that the hesitant approaches to social and economic reforms will now at least be implemented as planned and not talked about.
Right-wing parties are not viewed negatively on the stock market per se
The fact that a right-wing party achieved significant gains in votes is not generally viewed as negative on the stock market. During the Meloni government, the Italian stock market performed above average and, for example, significantly outperformed the Dax. With almost four years in office, the Meloni government has even set a record for Italian standards - there has never been so much political stability there since the Second World War.
Belgium and the Netherlands are examples of countries whose government formation often takes many months and produces shaky multi-party structures without this having much of an impact on economic development or stock markets.
The stock markets are not indifferent to politics. As long as companies can operate with some degree of legal certainty and politics doesn't bother them too much, the world is fine from the stock market perspective. There are also enough examples in which companies have relocated their headquarters or at least production facilities when the location conditions became too stressful or difficult for them.
In this respect, the stock exchanges have a global political lens and are subject to international competition for good location conditions for companies and for the living conditions of their employees. All of this also flows into company valuations on the stock market in the long term. But that rarely changes on just one election night. The capital markets are happy to wait for the results of what kind of policy will ultimately emerge. Speculations about downfall or resurrection scenarios are considered to have a lower probability of occurring than the basic scenario that a state election does not change the basic conditions too quickly.
