CAC 40
Encyclopedia
The CAC 40 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
.
The CAC 40 takes its name from the Paris Bourse
's early automation system Cotation Assistée en Continu
(Continuous Assisted Quotation). Its base value of 1,000 was set on 31 December 1987, equivalent to a market capitalisation of 370,437,433,957.70 French franc
s. 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. 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.
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. 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).
. 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.
with t the day of calculation; N the number of constituent shares in the index (usually 40); Qi,t the number of shares of company i on day t; Fi,t the free float factor of share i; fi,t the capping factor of share i (exactly 1 for all companies not subject to the 15% cap); Ci,t the price of share i on day t; Qi,0 the number of shares of company i on the index base date; Ci,0 the price of equity i on the index base date; and Kt the "adjustment coefficient for base capitalization" on day t (reflecting the switch from the French franc to the Euro
in 1999).
, Japan
ese, 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.
replaced by Safran
.
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
stock market index
Stock market index
A stock market index is a method of measuring a section of the stock market. Many indices are cited by news or financial services firms and are used as benchmarks, to measure the performance of portfolios such as mutual funds....
. The index represents a capitalization-weighted measure of the 40 most significant values among the 100 highest market caps on the Paris Bourse
Paris Bourse
The Paris Bourse is the historical Paris stock exchange, known as Euronext Paris from 2000 onwards.-History and functioning:...
(now Euronext Paris
Euronext Paris
Euronext Paris is France's securities market, formerly known as the Paris Bourse, which merged with the Amsterdam, Lisbon and Brussels exchanges in September 2000 to form Euronext NV, which is the second largest exchange in Europe behind the UK's London Stock Exchange...
). It is one of the main national indices of the pan-European stock exchange group Euronext
Euronext
Euronext N.V. is a pan-European stock exchange based in Amsterdam and with subsidiaries in Belgium, France, Netherlands, Portugal and the United Kingdom. In addition to equities and derivatives markets, the Euronext group provides clearing and information services...
alongside Brussels
Brussels
Brussels , officially the Brussels Region or Brussels-Capital Region , is the capital of Belgium and the de facto capital of the European Union...
' BEL20
BEL20
The BEL20 is the benchmark stock market index of Euronext Brussels. In general, the index consists of a minimum of 10 and a maximum of 20 companies traded at the Brussels Stock Exchange. Since 20 June 2011, the BEL20 has contained 20 listings.-Rules:...
, Lisbon
Lisbon
Lisbon is the capital city and largest city of Portugal with a population of 545,245 within its administrative limits on a land area of . The urban area of Lisbon extends beyond the administrative city limits with a population of 3 million on an area of , making it the 9th most populous urban...
's PSI-20
PSI-20
The PSI-20 is a benchmark stock market index of companies that trade on Euronext Lisbon, the main stock exchange of Portugal. The index tracks the prices of the twenty listings with the largest market capitalisation and share turnover in the PSI Geral, the general stock market of the Lisbon exchange...
and Amsterdam
Amsterdam
Amsterdam is the largest city and the capital of the Netherlands. The current position of Amsterdam as capital city of the Kingdom of the Netherlands is governed by the constitution of August 24, 1815 and its successors. Amsterdam has a population of 783,364 within city limits, an urban population...
's AEX
AEX index
The AEX index, derived from Amsterdam Exchange index, is a stock market index composed of Dutch companies that trade on Euronext Amsterdam, formerly known as the Amsterdam Stock Exchange. Started in 1983, the index is composed of a maximum of 25 of the most actively traded securities on the exchange...
.
History
Paris Bourse
The Paris Bourse is the historical Paris stock exchange, known as Euronext Paris from 2000 onwards.-History and functioning:...
's early automation system Cotation Assistée en Continu
Cotation Assistée en Continu
Cotation Assistée en Continu was an electronic trading system used at the Paris Bourse, the French stock exchange, in the 1980s and 1990s. It was introduced in 1986 for trading less liquid equities, and in 1989 it was operational for all listed stocks. The acronym is also used to refer to the CAC...
(Continuous Assisted Quotation). Its base value of 1,000 was set on 31 December 1987, equivalent to a market capitalisation of 370,437,433,957.70 French franc
French franc
The franc was a currency of France. Along with the Spanish peseta, it was also a de facto currency used in Andorra . Between 1360 and 1641, it was the name of coins worth 1 livre tournois and it remained in common parlance as a term for this amount of money...
s. 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
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
in September 2000. 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.
Selection
The CAC 40 index composition is reviewed quarterly by an independent Index Steering Committee . If any changes are made, they areeffected 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
Market capitalization
Market capitalization is a measurement of the value of the ownership interest that shareholders hold in a business enterprise. It is equal to the share price times the number of shares outstanding of a publicly traded company...
and share
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
turnover over the prior 12 months. 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
Investment management
Investment management is the professional management of various securities and assets in order to meet specified investment goals for the benefit of the investors...
" and "a suitable underlying asset for derivatives
Derivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
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 indexMarket value-weighted index
A capitalization-weighted index is an index whose components are weighted according to the total market value of their outstanding shares. Also called 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
Share price
A share price is the price of a single share of a number of saleable stocks of a company. Once the stock is purchased, the owner becomes a shareholder of the company that issued the share.-Behavior of share prices:...
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:with t the day of calculation; N the number of constituent shares in the index (usually 40); Qi,t the number of shares of company i on day t; Fi,t the free float factor of share i; fi,t the capping factor of share i (exactly 1 for all companies not subject to the 15% cap); Ci,t the price of share i on day t; Qi,0 the number of shares of company i on the index base date; Ci,0 the price of equity i on the index base date; and Kt the "adjustment coefficient for base capitalization" on day t (reflecting the switch from the French franc to the Euro
Euro
The euro is the official currency of the eurozone: 17 of the 27 member states of the European Union. It is also the currency used by the Institutions of the European Union. The eurozone consists of Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg,...
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. GermanGermany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
, Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
ese, American
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and British
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
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
Multinational corporation
A multi national corporation or enterprise , is a corporation or an enterprise that manages production or delivers services in more than one country. It can also be referred to as an international corporation...
, than any other European market. CAC 40 companies conduct over two thirds of their business and employ over two thirds of their workforce
Workforce
The workforce is the labour pool in employment. It is generally used to describe those working for a single company or industry, but can also apply to a geographic region like a city, country, state, etc. The term generally excludes the employers or management, and implies those involved in...
outside France.
Composition
The index consists of the following companies as of the quarterly update effective 19 September 2011 which saw NatixisNatixis
Natixis is a French corporate and investment bank created in November 2006 from the merger of the asset management and investment banking operations of Natexis Banque Populaire and IXIS ....
replaced by Safran
SAFRAN
Safran is a French conglomerate involved in defense, aerospace propulsion and equipment, and security. It is the result of a merger between the propulsion and aerospace equipment group SNECMA and the defense conglomerate SAGEM. Its headquarters are located in Paris.The name Safran, literally...
.
| Company | ICB Industry Classification Benchmark The Industry Classification Benchmark is an industry classification taxonomy developed by Dow Jones and FTSE. It is used to segregate markets into sectors within the macroeconomy... Sector | Ticker symbol | Index weighting (%) at 18 October 2011 |
|---|---|---|---|
| Accor Accor Accor is Europe's leading hotel group , part of the CAC 40 index , and operates in over 90 countries. Headquartered in Courcouronnes, Essonne, France, near Évry, France, the group owns, operates and franchises 4,229 hotels ranging from economy to luxury on five continents .Previously, the group... |
hotels | 0.56 | |
| Air Liquide Air Liquide L'Air Liquide S.A., or Air Liquide , is a major French company supplying industrial gases and services to various industries including medical, chemical and electronic manufacturers. Founded in 1902, it is first in the world market in its field, now operating in over 80 countries. It is... |
commodity chemicals | 4.46 | |
| Alcatel-Lucent Alcatel-Lucent Alcatel-Lucent is a global telecommunications corporation, headquartered in the 7th arrondissement of Paris, France. It provides telecommunications solutions to service providers, enterprises, and governments around the world, enabling these customers to deliver voice, data, and video services... |
telecommunications equipment | 0.85 | |
| Alstom Alstom Alstom is a large multinational conglomerate which holds interests in the power generation and transport markets. According to the company website, in the years 2010-2011 Alstom had annual sales of over €20.9 billion, and employed more than 85,000 people in 70 countries. Alstom's headquarters are... |
industrial machinery | 0.92 | |
| ArcelorMittal | steel | 2.03 | |
| AXA AXA AXA S.A. is a French global insurance group headquartered in the 8th arrondissement of Paris. AXA is a conglomerate of independently run businesses, operated according to the laws and regulations of many different countries. The AXA group of companies engage in life, health and other forms of... |
full line insurance | 3.21 | |
| BNP Paribas BNP Paribas BNP Paribas S.A. is a global banking group, headquartered in Paris, with its second global headquarters in London. In October 2010 BNP Paribas was ranked by Bloomberg and Forbes as the largest bank and largest company in the world by assets with over $3.1 trillion. It was formed through the merger... |
banks | 5.15 | |
| Bouygues Bouygues Bouygues S.A. is a French industrial group headquartered in the 8th arrondissement of Paris, France. Bouygues is listed on Euronext Paris exchange and is a blue chip in the CAC 40 stock market index. The company was founded in 1952 by Francis Bouygues and since 1989 has been led by his son Martin... |
heavy construction | 1.06 | |
| Capgemini Capgemini Capgemini is a French global IT services company, one of the world's largest management consulting, outsourcing and professional services companies with a staff of 114,274 operating in 40 countries. It is headquartered in Paris and was founded in 1967 by Serge Kampf, the current chairman, in... |
computer services | 0.68 | |
| Carrefour Carrefour Carrefour S.A. is an international hypermarket chain headquartered in Levallois-Perret, France. It is one of the largest hypermarket chains in the world... |
food retailers and wholesalers | 1.69 | |
| Crédit Agricole Crédit Agricole Crédit Agricole S.A. is the largest retail banking group in France, second largest in Europe and the eighth largest in the world by Tier 1 capital according to The Banker magazine. It is also part of the CAC 40 stock market index.... |
banks | 0.87 | |
| EADS EADS The European Aeronautic Defence and Space Company N.V. is a global pan-European aerospace and defence corporation and a leading defence and military contractor worldwide... |
aerospace | 1.55 | |
| EDF Électricité de France Électricité de France S.A. is the second largest French utility company. Headquartered in Paris, France, with €65.2 billion in revenues in 2010, EDF operates a diverse portfolio of 120,000+ megawatts of generation capacity in Europe, Latin America, Asia, the Middle East and Africa.EDF is one of... |
electricity | 1.09 | |
| Essilor Essilor Essilor International S.A. is a French company that produces ophthalmic lenses along with ophthalmic optical equipment. It is based in Paris, France, and quoted on the Euronext Paris Stock Exchange... |
medical supplies | 1.76 | |
| France Télécom France Télécom France Telecom S.A. is the main telecommunications company in France, the third-largest in Europe and one of the largest in the world. It currently employs about 180,000 people and has 192.7 million customers worldwide . In 2010 the group had revenue of €45.5 billion... |
fixed line telecommunications | 4.15 | |
| GDF Suez GDF Suez GDF Suez S.A. is a French multinational energy company which operates in the fields of electricity generation and distribution, natural gas and renewable energy. The world's largest utility after taking control of Britain's International Power, the company was initially formed by the merger of Gaz... |
gas distribution | 4.91 | |
| Groupe Danone Groupe Danone Groupe Danone is a French food-products multinational corporation based in the 9th arrondissement of Paris. It claims world leadership in fresh dairy products, marketed under the corporate name, and also in bottled water... |
food products | 4.30 | |
| L'Oréal L'Oréal The L'Oréal Group is the world's largest cosmetics and beauty company. With its registered office in Paris and head office in the Paris suburb of Clichy, Hauts-de-Seine, France, it has developed activities in the field of cosmetics... |
personal products | 3.28 | |
| Lafarge Lafarge Lafarge is a French industrial company specialising in four major products: cement, construction aggregates, concrete and gypsum wallboard. In 2010 the company was the world's second-largest cement manufacturer by mass shipped behind Holcim.-History:... |
building materials and fixtures | 0.90 | |
| LVMH LVMH LVMH Moët Hennessy • Louis Vuitton S.A., better known as LVMH, is a French multinational luxury goods conglomerate headquartered in Paris, Île-de-France, France. The company was formed after the 1987 merger of fashion house Louis Vuitton with Moët Hennessy, a company formed after the 1971 merger... |
clothing and accessories | 4.95 | |
| Michelin Michelin Michelin is a tyre manufacturer based in Clermont-Ferrand in the Auvergne région of France. It is one of the two largest tyre manufacturers in the world along with Bridgestone. In addition to the Michelin brand, it also owns the BFGoodrich, Kleber, Riken, Kormoran and Uniroyal tyre brands... |
tires | 1.52 | |
| Pernod Ricard Pernod Ricard Pernod Ricard is a French company that produces distilled beverages. The company's eponymous products, Pernod Anise and Ricard Pastis, are both anise-flavoured liqueurs and are often referred to simply as Pernod or Ricard... |
distillers and vintners | 2.00 | |
| PSA Peugeot Citroën PSA Peugeot Citroën PSA Peugeot Citroën is a French manufacturer of automobiles and motorcycles sold under the Peugeot and Citroën marques. Headquartered in the 16th arrondissement of Paris, PSA is the second largest automaker based in Europe and the number eight in the world.-History:In December 1974 Peugeot S.A.... |
automobiles | 0.45 | |
| PPR PPR (company) PPR is a French multinational holding company specializing in retail shops and luxury brands. The company was founded in 1963 by the businessman François Pinault and is now run by his son François-Henri Pinault. It is quoted on Euronext Paris and is a constituent of the CAC 40 index... |
broadline retailers | 1.39 | |
| Publicis Publicis Publicis Groupe is a French multinational advertising and communications company, headquartered in Paris, France. It is one of the world's three largest advertising holding companies . Its current president is Maurice Lévy. Publicis Groupe S.A... |
media agencies | 0.80 | |
| Renault Renault Renault S.A. is a French automaker producing cars, vans, and in the past, autorail vehicles, trucks, tractors, vans and also buses/coaches. Its alliance with Nissan makes it the world's third largest automaker... |
automobiles | 0.88 | |
| Safran SAFRAN Safran is a French conglomerate involved in defense, aerospace propulsion and equipment, and security. It is the result of a merger between the propulsion and aerospace equipment group SNECMA and the defense conglomerate SAGEM. Its headquarters are located in Paris.The name Safran, literally... |
aerospace | 0.97 | |
| Saint-Gobain Saint-Gobain Saint-Gobain S.A. is a French multinational corporation, founded in 1665 in Paris and headquartered on the outskirts of Paris at La Défense and in Courbevoie. Originally a mirror manufacturer, it now also produces a variety of construction and high-performance materials.The company has its head... |
building materials and fixtures | 2.30 | |
| Sanofi | pharmaceuticals | 9.92 | |
| Schneider Electric Schneider Electric Schneider Electric is a French global company. It was founded in 1836 by two brothers, Eugène and Adolphe Schneider.In the first part of the 20th century, Schneider et Cie associated itself with Westinghouse Systems, a major international electrical group at the time. The group began manufacturing... |
electrical components and equipment | 3.77 | |
| Société Générale Société Générale Société Générale S.A. is a large European Bank and a major Financial Services company that has a substantial global presence. Its registered office is on Boulevard Haussmann in the 9th arrondissement of Paris, while its head office is in the Tours Société Générale in the business district of La... |
banks | 2.29 | |
| STMicroelectronics STMicroelectronics STMicroelectronics is an Italian-French electronics and semiconductor manufacturer headquartered in Geneva, Switzerland.While STMicroelectronics corporate headquarters and the headquarters for EMEA region are based in Geneva, the holding company, STMicroelectronics N.V. is registered in Amsterdam,... |
semiconductors | 0.57 | |
| Suez Environnement Suez Environnement Suez Environnement S.A. is a French-based utility company which operates largely in the water treatment and waste management sectors. Formerly an operating division of Suez, the company was spun out as a stand-alone entity as part of the merger to form GDF Suez on 22 July 2008. GDF Suez remains... |
water | 0.56 | |
| Technip Technip Technip is a provider of project management, engineering, and construction services for the oil and gas industry, headquartered in Paris, France.... |
oil equipment and services | 1.11 | |
| Total Total S.A. Total S.A. is a French multinational oil company and one of the six "Supermajor" oil companies in the world.Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and... |
integrated oil and gas | 13.50 | |
| Unibail-Rodamco Unibail-Rodamco Unibail-Rodamco is a French-Dutch company, headquartered in Paris, that focuses on investment in commercial property. It is the largest commercial real estate company in Europe. The main assets managed by the company fall into three categories: shopping centres, convention centres and office... |
real estate investment trusts | 2.31 | |
| Vallourec Vallourec Vallourec S.A. is a French group of companies specialised in hot rolled seamless steel tubes, expandable tubular technology, automotive parts and stainless steel. The firm is headquartered in the Paris suburb of Boulogne-Billancourt... |
industrial machinery | 0.75 | |
| Veolia Environnement | water | 0.68 | |
| Vinci | heavy construction | 2.70 | |
| Vivendi | broadcasting and entertainment | 3.14 |