BERLIN - GERMANY want to force investors to declare stock option holdings to prevent a repeat of panic buying of Volkswagen shares that has rocked the Frankfurt stock market, a press report said on Monday.

Berlin has given itself until April to come up with regulations that would oblige investors to declare holdings as they passed certain thresholds, already the case with normal equity stakes, the Financial Times Deutschland reported.

It quoted 'financial affairs specialists' within the country's coalition government.

The luxury sports car maker Porsche was able to secure control over almst 75 per cent of the shares in VW in part owing to undeclared stock option holdings.

When the size of Porsche's stake was disclosed, investment funds that had sold borrowed VW stock in anticipation of a fall in value were forced to buy the relatively few shares available, sending their price soaring by more than 100 percent on certain days.

The German state of Lower Saxony, where VW is based, owns 20.1 per cent of its shares, leaving very little to float freely on the market.

At one point, VW shares were quoted at 1,005 euros, making it briefly the biggest company in the world by market value.

The issue also temporarily represented 27 per cent of the total DAX 30 index, causing it to post positive or negative results even when all other shares were posting opposite results.

A similar use of stock options was used by auto parts company Schaeffler, which succeeded in taking over much bigger rival Continental quietly building up a minority blocking stake before launching its public offer for the rest of the shares. -- AFP