BONN — THE centuries-old rivalry between Germany's financial centers Frankfurt and Berlin ended when the capital fell to the Four Allied Powers and was divided by cold-war differences. Deprived of its access to outside markets and affluent investors - both of which helped give Berlin its reputation for financial strength - the city's fate was sealed with the currency reform of 1948 which left Frankfurt the victor. Now, the currency union of 1990 is helping Berlin to rebuild toward its former glory. Wilfried H"ubscher, chief executive of the Berlin Stock Exchange, says the introduction of the deutsche mark (DM) in East Germany means the possible formation of some 500 to 600 joint-stock companies ``all looking to Berlin and the advantages of its stock market.''
This view is supported by Bonn Economic Minister Helmut Hausmann, who says he expects the first German-German company to go on the stock exchange before the end of this year - and choose Berlin over Frankfurt as the place to do it.
The reason is Berlin's proximity to East Germany and its opening markets. The German Democratic Republic will most probably not want to invest the time and money necessary to construct an exchange of its own, so it will adopt that of West Berlin, Mr. H"ubscher says. As a result, he adds, Berlin is ``rising from its ashes to become a new German-German stock exchange and a door to the East.''
Already, major banks and businesses have recognized this new opportunity and indicated their intentions to move a part of their operations to Berlin. Daimler-Benz AG, on the eve of the July 1 currency union, repeated its plan to shift its services and sales division from Stuttgart to historic Potsdamerplatz in East Berlin. Such moves mean Berlin as a whole is on its way to becoming a center for business and bureaucracy - even if it never regains its status as the nation's capital.
For analysts such as Tom Holmes of Schr"oder, M"unchmeyer & Hengst, this influx of executives and affluent individuals will probably make Berlin more attractive for investment banks as well. The Berlin stock exchange, Mr. Holmes says, will benefit from the attention indirectly.
Frankfurt, he says, won't lose to Berlin, but Berlin ``will win in areas where Frankfurt can't compete'' based on its proximity to emerging businesses and eager investors. H"ubscher takes it a step further and argues that Frankfurt will concentrate on fixed-interest securities while Berlin takes on and excels in stocks and share certificates.
In fact, stock trading there rose dramatically after the Berlin Wall fell. Comparing first-quarter figures, volume on the Berlin market jumped 84 percent from DM$13.8 billion in 1989 to DM$25.3 billion in 1990.
All this gives H"ubscher reason to believe Berlin will regain its position among Germany's seven stock exchanges and rise to rival Frankfurt as the ``focus of public and financial community interest.'' He says Berlin can accomplish this goal and reclaim its reputation in about five years.
Although Berlin economists are confident this trend will continue, Frankfurt officials say international banks and businesses will stay with Frankfurt. Says one Dresdner Bank analyst: ``Berlin is the attraction, but the base is in Frankfurt.'' The currency union will benefit Berlin, but not enough to overtake Frankfurt, the analyst says.
And, according to Bernd Waldeck, managing director of the Frankfurt Stock Exchange, there is no need for the two to compete in the first place. Mr. Waldeck says each of Germany's stock exchanges can benefit from the move toward German unity.
Volume on D"usseldorf's stock exchange for the first half of 1990 jumped to DM$350 billion from DM$75 billion in 1989. And volume on the Frankfurt stock exchange increased from DM$676 billion for the period January through April 1989 to DM$925 billion for the same period in 1990.
Commerzbank spokesman Peter Pietsch says the potential for growth on the Berlin exchange is high because its appeal to the East is greater, but Frankfurt will continue to attract the international players. In short, Mr. Pietsch says, Frankfurt will keep its focus on the West, Berlin will concentrate on the East - and Germany as a whole will benefit.