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CAC 40 Index


The CAC 40 (French: CAC Quarante), which takes its name from the Paris Bourse's early automation system Cotation Assistťe 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.


Price evolution of the CAC 40 between 1987 and 2007
Price evolution of the CAC 40 between 1987 and 2007

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.[2] 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.[3] 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.[4]



The CAC 40 index composition is reviewed quarterly by an independent Index Steering Committee (French: Conseil Scientifique).[2] If any changes are made, they are effected a minimum of two weeks after the review meeting.[2] 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.[5] 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".[5] 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).[5]


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.[2] Since December 2003, the index weightings of companies in the index have been capped at 15% at each quarterly index review,[5] 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.[5]


The index value I of the CAC 40 index is calculated using the following formula:[5]

 I_t = 1000\times\frac{\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); 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).


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.[6] 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.[7]


A list of the CAC 40 companies, as of the quarterly review effected on 18 July 2007. No changes have been made to the index at the three subsequent reviews.[2]

Company ICB Sector Ticker symbol Index weighting (%)1
Accor hotels AC 1.17
Air France-KLM airlines AF 0.59
Air Liquide commodity chemicals AI 2.25
Alcatel-Lucent telecommunications equipment ALU 1.21
Alstom industrial machinery ALO 1.50
ArcelorMittal steel MTP 4.12
AXA full line insurance CS 4.68
BNP Paribas banks BNP 6.45
Bouygues heavy construction EN 1.68
Capgemini computer services CAP 0.54
Carrefour food retailers and wholesalers CA 3.15
Credit Agricole banks ACA 1.86
Dexia banks DX 1.02
EADS aerospace EAD 0.75
EDF electricity EDF 2.13
Essilor medical supplies EF 0.84
France Telecom fixed line telecommunications FTE 4.76
Gaz de France gas distribution GAZ 0.88
Groupe Danone food products BN 2.90
L'Oreal personal products OR 2.48
Lafarge building materials and fixtures LG 1.77
Lagardère publishing MMB 0.66
LVMH clothing and accessories MC 2.10
Michelin tires ML 1.09
Pernod Ricard distillers and vintners RI 1.32
PSA Peugeot Citroenn automobiles UG 0.82
PPR broadline retailers PP 0.83
Renault automobiles RNO 1.86
Saint-Gobain building materials and fixtures SGO 2.36
Sanofi-Aventis pharmaceuticals SAN 6.65
Schneider Electric electrical components and equipment SU 2.20
Societe Generale banks GLE 4.62
STMicroelectronics semiconductors STM 0.67
Suez multiutilities SZE 5.26
Total integrated oil and gas FP 12.41
Unibail-Rodamco real estate investment trusts UL 1.19
Vallourec industrial machinery VK 0.96
Veolia Environnement water VIE 2.36
Vinci heavy construction DG 2.47
Vivendi broadcasting and entertainment VIV 3.43

Note 1: - Weightings accurate at close of trade on 3 December 2007.


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