France 40

France 40

Overview of France 40

France 40 or the CAC 40 Index is an index of the stocks of the 40 largest French companies. In terms of market capitalisation, they are selected from the top companies listed on the NYSE Euronext. The France 40 Index is a market value weighted index, composed of the 40 highest levels among the 100 highest market caps on the Paris Bourse. The CAC 40 takes its name from the early automation system used by the Paris Bourse. On 31 December 1987 its base value of 1,000 was set, equal to a market capitalisation of 370,437,433,957.70.

History of France 40

The acronym “CAC” stood for “Compagnie des Agents de Change”. This is the term for the company which originally controlled the Paris Stock Exchange. According to records, stock dealing by “agents de changement” or stock brokers existed in France since at least the 16th century. During Napoleon’s administration in 1801, with the opening of the Paris Stock Exchange, a “Compagnie of Agents de Change” was created, and a company of 71 officially recognised brokers was assigned to carry out trading activities. The Compagnie des Agents de Change was dissolved, with the Stock Market Reform Act of January 1988. Although a private partnership the Société des Bourses Françaises was established in its place. The institutional term “CAC” persisted, and the CAC 40 index was formally introduced on June 15, 1988 with a base value of 1,000 as of December 31, 1987. Its arrival in France coincided with the advent of electronic trading in the region, and the acronym “CAC” then came to stand for “Cotation Assistée en Continu,” or Continuous Assisted Quotation (stock price). In September 2000 the index hit an all-time high of 6922.33, and a lifetime low of 893.82 in January 1988.

Market capitalization of France 40

An independent Index Steering Committee (French: Conseil Scientifique) quarterly reviews the composition of the CAC 40 index. If any modifications are made, they will be made at least two weeks after the review meeting. The companies listed on euronext paris are rated by free float market capitalisation and equity. Turnover are over the previous 12 months at each review date. Of the top 100 companies in this list, 40 are chosen to join the cac 40. If a company has more than one class of shares traded on the exchange, only those that are most traded will be accepted into the index. Usually this will be the common share. The CAC 40 is an index, weighted by capitalisation. A company’s number of issued shares is reviewed quarterly, on the third Friday of March, June, September and December. The index weightings of the firms in the index have been fixed at 15% at each quarterly index analysis since december 2003. Although these vary freely with share price. A capping factor is used to restrict the weights to 15% and is checked quarterly on the third Friday of September by the Index Steering Committee. The position and oversight of the index shall be carried out by Le Conseil Scientifique. This is a steering committee consisting of members of the French market regulator AMF (Autorité des Marchés Financiers), the French Central Bank and the French Treasury, academics and economists. To appear on the index on the Euronext Paris Exchange stocks must meet market capitalization and trading volume criteria. The issuers must maintain “significant” assets or a major headquarters. This is for decision making in France. However, issuers’ ethnicity isn’t considered a factor.
 

Holders of France 40

While the CAC 40 is almost comprised of French-domiciled firms, foreign investors own about 45% of its listed securities. This is more than any other main European index. French, Japanese, US and UK investors are among the biggest holders of CAC 40 stock. This huge percentage is due to the more foreign, or global, cac 40 firms than any other european market. Over two-thirds of CAC 40 companies operate their business and use more than two-thirds of their workforce outside France.

Top companies that traded on CAC 40

The top companies listed by market capitalization on the cac 40 include: absolute, sanofi, l’oreal, l’vmh, bnp paribas, axa, airbus group, danone, orange and vinci. The index represents a combined market capitalization of âĤ¬1.1 trillion. Firms ranging from âĤ¬5 billion to âĤ¬105 billion on the market capitalization index list.
 

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