Compagnie des Agents de Change 40 Index

The CAC 40 index, the main real­time indicator of the French stock market, is a subset of the new SBF 120 index. Both indexes have been established followingthe same guiding principles.

A sample of 40 French stocks listed on the so-called Monthly Settlement Market (also known as the "RM" or the "Règlement Mensuel") constitutes the CAC 40 index. Component stocks are selected on the basis of criteria related to both each individual stock and the index as a whole. First, for a stock to be eligible for inclusion in the index its market capitalization must rank among the 100 largest market capitalizations in the Monthly Settlement Market. Second, the criterion of liquidity, which is split into two subcriteria, the breadth and the depth of the market in each stock, must be passed. The breadth of the market is determined by the float, the daily transaction volume, and the turnover rate, that is the ratio of turnover to market capitalization. Depth is measured by the average spread (that is the difference between the best bid and best ask prices in percentage terms), and by volatility, which is deemed to be evidence of a continuing flow of bids and asks.

The CAC 40 index is the mainstay of the index family of SBF-Paris Stock Exchange and serves as a core sample of index stocks to which additional stocks are added to derive indexes with specific features. The index is adjusted in an equal manner if any of the following intervention-prompting transactions occur:

  • removal of a stock from the Official List or the Second Market
  • additions; given the hierarchical structure of the CAC 40 and the SBF indexes, any stock that is added to the CAC 40 index sample is automatically included in the broader-based indexes
  • stock splits (stock consolidations) do not prompt an adjustment procedure; by their very nature value indexes
  • automatically offset the increase (decrease) in the number of outstanding shares by a corresponding decrease (increase)
  • in the share price
  • bonus issues
  • cash issues with preemptive subscription rights
  • distribution of assets in the form of cash or securities not subject to personal income tax
  • listings of additional shares
  • corporate mergers.
Compagnie des Agents de Change 40 Index, Société des Bourses Françaises (SBF) - Bourse de Paris (Association of French Stock Exchanges - Paris Stock Exchange). Text: Institute for Advanced Studies, Vienna, 1998. All rights reserved.

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