CAC 40

CAC 40 , which takes its name of the system of " Quotation Assisted uninterrupted " , is the main thing Market index on the place of Paris. Created by the Company of the Stockbrokers, it is given starting from the courses of 40 shares quoted uninterrupted on the Primary market among the 100 companies whose exchanges are most abundant on Euronext Paris.

These values, representative of the various branches of activity, reflect in theory the total tendency of the economy of the French large companies and their list is re-examined regularly to maintain this représentativité.
L' index accounts for approximately 70% of the total capitalization of the Place of Paris, that is to say 1300 Billion euros.

The cac 40 fact part of Euronext which is the first European purse.

History of index CAC 40

Main developments

CAC, which meant Compagnie of the Stockbrokers, means today C otation has ssistée in C ontinu: the index thus gives, uninterrupted, an idea of the evolution of the marché.
Defined with the value of 1.000 points the 12/31/1987, the CAC 40 is born officially on June 15th 1988.
Its creation makes following the crash of 1987 which modified the monopoly of the stock exchange transactions. Indeed, managed before by members of the legal profession, the stockbrokers were transformed into companies of purse.

Since December 1st, 2003, the CAC 40, following the example principal world indices adopts the system of the floating market cap, i.e. the number of titles really available on the market and either like before based by their simple market cap.

It reaches its maximum in the year 2000 the September 4th at 6944,77 points before crumbling up to 2401,15 points the March 12th 2003 after the bursting of a Speculative bubble relating to the Secteur S of the communication and Internet, worsened thereafter with the terrorist events of the September 11th, 2001.

Recent evolution

The December 30th 2005, the CAC encloses at 4715 points. In January 2006, it crossed the bar of the 4800 points and, then, continued its rise to reach 5329,16 the May 11th. It is then carried in an abrupt world fold from 14,50% to 4564,69. Since this retreat of almost 800 points, the CAC 40 was raised the June 30th of almost 500 points, close to the symbolic mark of the 5000. Since this rebound, the CAC 40 continues its rise. January 1st, 2007, it crosses the bar of the 5600 points, level which it had not reached any more since the month of May 2001. The CAC40 passes by again with the rise the 6000 points on May 2nd, 2007, which shows the good health of the Parisian index, with a rise of 150% in approximately 4 years. The June 18th 2007, the CAC records the arrival of Air France-KLM and Unibail instead of AGF and Thomson.

Operation of the index

The index CAC 40 is open 9:00 to 17:30 and updated every 30 seconds during the day of 9:00 at 17:30.
The day starts initially with a phase of pre-opening of 7:15 to 9:00 where the orders accumulate without no transaction being réalisée.
Then of 9:00 to 17:30, quotation is carried out in " continu".
Closing rates is fixed at 17:35 (fixing in stock exchange jargon) after 5 minutes when the equilibrium price is calculated in order to allow the exchange of the greatest number of titles.

The course of one of the 40 titles can see its quotation suspended during 15 minutes if it varies of more than 10%, then twice 5% in the same direction. It is said whereas the title is reserved for the rise or the fall.

Each of the 40 companies balances the index according to the quantity of titles available on the market. Weightings vary from one company to another according to its capitalization and from the exchanges which have occurred on the value. When a value dimensions with the rise, the CAC 40 increases weighting of the value.

Its composition is updated regularly by a committee of experts: the index must be representative of the Parisian financial market as well in term of volumes of transactions as of representativeness of the branches of industry.

When a company is not dimensioned any more, it is replaced by one of the values of CAC Next 20 fulfilling the financial requirements of quotation in index CAC 40 (liquidity of the title, sufficient market cap, important daily newspapers exchange of titles…)

Remarks

The weight of the capitalization of a value on the index cannot exceed the 15%.
Ainsi, in 2004, TOTAL was reached a maximum with 15%.

One should not confuse the long-term evolution of the CAC 40 and that in the long run of the whole of the values dimensioned on this purse, since the values which behave badly end up being replaced in its list by others having taken the advantage on elles.
On the other hand, a wallet of actions given can be fixed like constraint to have possible composition the closest to that of the CAC 40.
Thus a wallet including/understanding the 40 values of the CAC 40 of the day will be degraded gradually and its evolution will not be any more that of the CAC 40 three months later and thus of following the wire of the temps.
Financial products as the Tracker make it possible nevertheless to invest while sticking to the index.

Composition of index CAC 40

at the 8/31/2007 expressed as a percentage:

See too

External bonds

Course of the CAC 40 on Internet site of Euronext

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