Deutsche Wohnen’s Fast DAX Exit Catches Investors Off Guard

Deutsche Wohnen SE’s exclusion from Germany’s blue-chip index DAX just days after a rival acquired the bulk its shares caught investors by surprise and sparked the biggest drop in the shares in more than two years.

A decision by Deutsche Boerse AG’s index provider Qontigo to kick the country’s second-largest landlord out of the stock index came with little warning. Vonovia SE on Tuesday announced that it bought 87.6% of Deutsche Wohnen’s shares in its $19 billion tender offer.

While that’s shy of the 90% threshold that would trigger an immediate exclusion, Qontigo said it applied the fast-exit ...