CAC 40

Infobox Index
name = CAC 40
foundation = 1987
operator = Euronext
exchanges = Euronext Paris
constituents = 40
cap_level = Large cap
mc
€ 1.023 trillion (2007) [cite web|url=http://www.euronext.com/editorial/wide/editorial-7327-EN.html|title=Euronext Paris - Cash Market full monthly statistics report: December 2007|accessdate=2008-01-26|publisher=Euronext]
weighting = Market value-weighted
related = CAC Next 20, CAC Mid 100, CAC Small 90
homepage = [http://www.nyse.com/cac40 www.nyse.com/cac40] The CAC 40 (French: "CAC quarante" IPA: IPA|/kak.ka.ʁɑ̃t/), which takes its name from the Paris Bourse's early automation system Cotation Assistée en Continu ("Continuous Assisted Quotation"), is a benchmark French stock market index. The index represents a capitalization-weighted measure of the 40 most significant values among the 100 highest market caps on the Paris Bourse (now Euronext Paris). It is one of the main national indices of the pan-European stock exchange group Euronext alongside Brussels' BEL20, Lisbon's PSI-20 and Amsterdam's AEX.

History

The CAC 40's base value of 1,000 was set on 31 December 1987, equivalent to a market capitalisation of 370,437,433,957.70 French francs.cite web
url=http://www.euronext.com/editorial/wide/editorial-2667-EN-FR0003500008.html?selectedMep=1
title=CAC 40 index profile
publisher=Euronext
accessdate=2007-12-03] In common with many major world stock markets, its all-time high to date (6922.33 points) was reached at the peak of the dot-com bubble in September 2000. [cite news
url=http://news.bbc.co.uk/1/hi/business/3359241.stm
title=Investors celebrate stock market boom
publisher=BBC News
date=31 December, 2003
accessdate=2007-12-03] In 1 December 2003, the index's weighting system switched from being dependent on total market capitalisation to free float market cap only, in line with other leading indices. [cite press release
url=http://www.euronext.com/news/press_release/press_release-1731-EN.html?docid=59760
title=CAC40 shift to free-float weighting: revision of free-float calculation and capping factors
date=5 November, 2003
publisher=Euronext
accessdate=2007-12-03]

Rules

election

The CAC 40 index composition is reviewed quarterly by an independent Index Steering Committee ( _fr. Conseil Scientifique). If any changes are made, they are effected a minimum of two weeks after the review meeting. At each review date, the companies listed on Euronext Paris are ranked according to free float market capitalisation and share turnover over the prior 12 months.cite web
url=http://www.euronext.com/fic/000/019/620/196203.pdf
title=Rules for the CAC 40 Index
publisher=Euronext
date=December 2006
accessdate=2007-12-02] From the top 100 companies in this ranking, forty are chosen to enter the CAC 40 such that it is "a relevant benchmark for portfolio management" and "a suitable underlying asset for derivatives products". If a company has more than one class of shares traded on the exchange, only the most actively traded of these will be accepted into the index (generally this will be the ordinary share).

Weighting

The CAC 40 is a market value-weighted index. The number of issued shares (used to calculate the market cap and hence the index weight) of a company is reviewed quarterly, on the third Friday of March, June, September and December. Since December 2003, the index weightings of companies in the index have been capped at 15% at each quarterly index review, but these range freely with share price subsequently. A capping factor is used to limit the weights to 15% (if necessary), and is reviewed annually by the Index Steering Committee on the third Friday of September.

Calculation

The index value I of the CAC 40 index is calculated using the following formula:

$I\_t\; =\; 1000\; imesfrac\{sum\_\{i=1\}^N\; Q\_\{i,t\},F\_\{i,t\},f\_\{i,t\},C\_\{i,t\},\}\{K\_t,sum\_\{i=1\}^N\; Q\_\{i,0\},C\_\{i,0\},\}$

with "t" the day of calculation; "N" the number of constituent shares in the index (usually 40); "Q_i,t" the number of shares of company "i" on day "t"; "F_i,t" the free float factor of share "i"; "f_i,t" the capping factor of share "i" (exactly 1 for all companies not subject to the 15% cap); "C_i,t" the price of share "i" on day "t"; "Q_i,0" the number of shares of company "i" on the index base date; "C_i,0" the price of equity "i" on the index base date; and "K_t" the "adjustment coefficient for base capitalization" on day "t" (reflecting the switch from the French franc to the Euro in 1999).

Holdings

Although the CAC 40 is almost exclusively composed of French-domiciled companies, about 45% of its listed shares are owned by foreign investors, more than any other main European index. [cite web
last=Chirac
first=Jacques
authorlink=Jacques Chirac
url=http://www.ambafrance-us.org/news/statmnts/2006/european_coucil_chirac_press_conference032406.asp
title=Press conference given by Jacques Chirac, President of the Republic, following the European Council (excerpts)
date=24 March, 2006
accessdate=2007-12-03] German, Japanese, American and British investors are amongst the most significant holders of CAC 40 shares. This large percentage is due to the fact that CAC 40 companies are more international, or multinational, than any other European market. CAC 40 companies conduct over two thirds of their business and employ over two thirds of their workforce outside France. [cite web
last=Lagarde
first=Christine
authorlink=Christine Lagarde
url=https://pastel.diplomatie.gouv.fr/editorial/actual/ael2/bulletin.gb.asp?liste=20060517.gb.html
title="France and Globalization": Lecture Given by Mme Christine Lagarde, Minister Delegate for Foreign Trade, to The Ecole des Hautes Etudes Commerciales in Lille (excerpts)
date=6 May, 2006
accessdate=2007-12-03]

Composition

The index consists of the following companies as of the inclusion of Suez Environnement on 22 September, 2008. The index had previously consisted of just 39 companies on a temporary basis after the Suez-Gaz de France merger. [cite news|url=http://uk.reuters.com/article/rbssIndustryMaterialsUtilitiesNews/idUKLS10207520080828|title=Suez Environnement to join CAC-40|last=Belot|first=Jean-Michel|coauthors=Hepher, Tim|date=28 August 2008|work=Reuters|accessdate=2008-09-22]

fnb|1 - Weightings accurate at close of trade on 22 September 2008.

References

ee also

* List of French companies

External links

* [http://www.euronext.com/trader/summarizedmarket/stocks-2549-EN-FR0003500008.html?selectedMep=1 Official Euronext page for CAC 40 Index]
* [http://finance.yahoo.com/q?s=%5EFCHI FCHI: Summary for CAC 40 INDEX - Yahoo! Finance]
* [http://www.reuters.com/finance/markets/index?symbol=fr!CAC Thomson Reuters page for .FCHI ]
* [http://www.bloomberg.com/apps/quote?ticker=CAC:IND Bloomberg page for CAC:IND]