Navigating Turbulence in Frankfurt's Scale Market: Winners and Risks in a Volatile Landscape

The Frankfurt Stock Exchange’s Scale segment, a haven for small and mid-sized enterprises, has become a microcosm of global market instability. Recent data from the Deutsche Börse’s Scale All Share Index reveals a stark decline—dropping from 1,133 points in March 2025 to 1,012 by mid-April—a reflection of broader sell-offs, tariff wars, and geopolitical uncertainty. Yet within this turbulence, select companies have surged, proving that even in chaos, opportunities for strategic investors exist.

The Scale Segment in Crisis Mode

The Scale All Share Index’s 10.7% monthly drop underscores the fragility of small-cap markets. Geopolitical tensions, particularly U.S.-China tariff disputes and customs bottlenecks, have exacerbated volatility. Companies reliant on global supply chains or export-driven revenue face heightened risks.

Winners in the Storm: Steyr Motors and the Armaments Boom

Amid the turmoil, Steyr Motors (AT0000A3FW25) stands out as a paradoxical success story. Despite a dramatic correction from a March peak of €430 to €34 by April, its shares had doubled year-to-date, fueled by a massive Indian defense contract. The engine manufacturer’s pivot to military supply chains—part of a global arms boom—has insulated it from broader market declines.

Yet Steyr’s gains come with caveats. Mutares, a former controlling shareholder, slashed its stake to ~40%, signaling caution about the stock’s sustainability. The company’s trading volumes—€205 million in March alone—also hint at speculative overreach, with retail investors driving much of the volatility.

Resilience Beyond Defense: Swissnet and 2G Energy

While defense stocks dominate headlines, other sectors show resilience. Swissnet (CH0451123589) led the Scale segment over 12 months with a 57% price surge, benefiting from its niche in telecom infrastructure. Meanwhile, 2G Energy (DE000A0HL8N9), a clean energy firm, saw shares rise to €25.10 in April from €22.80 in late 2024, driven by robust sales and profit growth.

The Vegan Comeback: Veganz’s Strategic Shift

Even consumer-facing companies are adapting. Veganz Group (DE000A3E5ED2) rebounded from €5 to €7.22 per share in early 2025 by slashing losses through store closures and focusing on high-margin products like plant-based milk (“Mililk”). This pivot mirrors broader trends in sustainable consumer goods, where niche players thrive by targeting health-conscious buyers.

Cantourage: Betting on Regulatory Change

The medical cannabis sector offers another gamble. Cantourage (DE000A3DSV01) reported record Q1 2025 turnover of €25.6 million, yet its shares fell to €4.20—a disconnect analysts attribute to regulatory uncertainty. Montega AG remains bullish, citing Germany’s autumn 2025 review of cannabis laws. If legalization expands, Cantourage’s price target of €12 could materialize.

Structural Risks and Regulatory Realities

The Scale segment’s transparency requirements—audited financials within six months, mandatory research reports—aim to mitigate risks but attract investors tolerant of volatility. Companies like Cyan (DE000A2E4SV8) and Deutsche Rohstoff AG (DE000A0XYG76), with smaller turnovers, face liquidity challenges, making them vulnerable to market swings.

Analyst Outlook: Caution Meets Optimism

• DZ Bank predicts a year-end rally for equities, targeting the DAX at 23,000 by 2025 and 25,000 by mid-2026, citing U.S. tax cuts and European defense spending.
• DWS analysts, however, warn of “panic territory” sentiment in U.S. markets, recalling the prolonged downturn of 2022.

Conclusion: Volatility as a Catalyst for Strategic Investing

The Scale market’s turbulence is undeniably a burden for many, yet it also sharpens opportunities. Defense stocks like Steyr and infrastructure plays like Swissnet demonstrate the rewards of sector-specific tailwinds. Meanwhile, companies like Veganz and Cantourage show that agility in restructuring and regulatory anticipation can turn headwinds into advantages.

Investors should prioritize diversification—balancing exposure to defensive sectors (e.g., 2G Energy’s clean energy) with high-risk, high-reward bets (e.g., Cantourage’s cannabis play). Regulatory clarity, particularly in Germany’s cannabis laws, and geopolitical stability will be critical.

The Scale segment’s performance reinforces a timeless truth: in volatile markets, sector selection and company fundamentals matter more than ever. While the path ahead remains uncertain, those who bet on resilience—and avoid chasing speculative peaks—may find the turbulence itself a source of gain.