CAC 40

The CAC 40 (French: CAC quarante IPA: /kak.ka.ʁɑ̃t/), which takes its name from the Paris Bourse's early automation system Cotation Assistée 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.


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. 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.



The CAC 40 index composition is reviewed quarterly by an independent Index Steering Committee (Conseil Scientifique). If any changes are made, they are 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 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. 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.


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

I_t = 1000timesfrac{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. 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.


The index consists of the following companies as of the inclusion of Suez Environnement on 22 September, 2008. The index had previously consisted of just 39 companies on a temporary basis after the Suez-Gaz de France merger.

Company ICB Sector Ticker symbol Index weighting (%)1
Accor hotels 0.91
Air France-KLM airlines 0.53
Air Liquide commodity chemicals 2.90
Alcatel-Lucent telecommunications equipment 0.75
Alstom industrial machinery 1.53
ArcelorMittal steel 4.16
AXA full line insurance 5.14
BNP Paribas banks 7.44
Bouygues heavy construction 1.31
Capgemini computer services 0.62
Carrefour food retailers and wholesalers 2.73
Crédit Agricole banks 2.02
Dexia banks 0.77
EADS aerospace 0.67
EDF electricity 2.34
Essilor medical supplies 0.98
France Télécom fixed line telecommunications 5.07
GDF Suez gas distribution 6.08
Groupe Danone food products 3.03
L'Oréal personal products 2.60
Lafarge building materials and fixtures 1.45
Lagardère publishing 0.46
LVMH clothing and accessories 2.32
Michelin tires 0.76
Pernod Ricard distillers and vintners 1.39
PSA Peugeot Citroën automobiles 0.70
PPR broadline retailers 0.71
Renault automobiles 1.29
Saint-Gobain building materials and fixtures 1.53
Sanofi-Aventis pharmaceuticals 6.32
Schneider Electric electrical components and equipment 1.91
Société Générale banks 5.00
STMicroelectronics semiconductors 0.64
Suez Environnement water 0.70
Total integrated oil and gas 13.47
Unibail-Rodamco real estate investment trusts 1.58
Vallourec industrial machinery 1.10
Veolia Environnement water 1.47
Vinci heavy construction 2.05
Vivendi broadcasting and entertainment 3.61

- Weightings accurate at close of trade on 22 September 2008.


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