IBEX 35

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IBEX 35
Foundation 1992
Operator Bolsas y Mercados Españoles
Exchanges Bolsa de Madrid
Constituents 35
Type Large cap
Market cap € 527.6 billion (2007)[1]
Weighting
method		 Market value-weighted
Related 
indices		 Madrid General Index
Website www.ibex35.com
Values of the IBEX 35 between 1994 and 2007.
Values of the IBEX 35 between 1994 and 2007.
IBEX closing values between 21 and 24 January 2008, showing both the biggest one-day gain and fall.
IBEX closing values between 21 and 24 January 2008, showing both the biggest one-day gain and fall.

The IBEX 35 (an acronym of Iberia Index) is the benchmark stock market index of the Bolsa de Madrid, Spain's principal stock exchange. Initiated in 1992, the index is administered and calculated by Sociedad de Bolsas, a subsidiary of Bolsas y Mercados Españoles (BME), the company which runs Spain's securities markets (including the Bolsa de Madrid). It comprises the 35 most liquid Spanish stocks traded in the Madrid Stock Exchange General Index, which are reviewed twice annually. Trading on options and futures contracts on the IBEX 35 is provided by MEFF (Mercado Español de Futuros Financieros), another subsidiary of BME.[2]

Contents

[edit] History

The IBEX 35 was inaugurated on 14 January 1992,[3] although there are calculated values for the index back to 29 December 1989, where the base value of 3,000 points lies.[4]

Since the turn of the century, the index has outperformed many of its Western peers,[5] driven by relatively strong domestic economic growth which has particularly helped construction and real estate stocks.[6] Consequently, while the record highs to date of the FTSE 100, CAC 40 and AEX, for example, were set during the dot-com bubble in 1999 and 2000, the IBEX 35's all-time maximum of 15,945.70 was reached on 8 November 2007.[7][8]

The week of the January 2008 stock market downturn was characterised by extreme volatility in the markets, and saw both the biggest one day percentage fall and rise in the IBEX 35's history. The index closed 7.5% down on 21 January 2008, the second biggest fall in the Spanish equity market since 1987,[9] and rose a record 6.95% three days later.[10]

[edit] Rules

[edit] Selection

The composition of the IBEX 35 is reviewed twice per year (in June and December)[11] by the so-called Technical Advisory Committee, which consists of "representatives of the stock exchanges and derivatives markets, as well as... renowned experts from the academic and financial fields".[11] If any changes are made, they are effected on the first trading day of July or January.[11] In general, at each review, the 35 companies with the highest trading volume in Euros over the previous six months are chosen for inclusion in the index, provided that the average free float market cap of the stock is at least 0.3% of the total market cap of the index.[4] Any candidate stock must also have either been traded on at least a third of all trading days in the previous six months,[11] or rank in the top twenty overall in market cap[12] (thus allowing large recently IPO'ed companies to be included).

[edit] Weighting

The Bolsa de Madrid.
The Bolsa de Madrid.

The IBEX 35 is a market value-weighted index.[11] The market cap used to calculate the weighting of each constituent is multiplied by a free float factor (ranging from 0.1 to 1) depending on the fraction of shares not subject to block ownership.[4] Any company with 50% or more of its shares considered free float is given a free float factor of 1.[4] Unlike many other European benchmark indices, the weightings of companies in the IBEX 35 are not capped.

[edit] Calculation

The index value (given here as I) of the IBEX 35 index is calculated using the following formula:[4]

I(t) = I(t-1)\times\frac{\sum_{i=1}^{35} Cap_{i}(t)\,}{[\,\sum_{i=1}^{35} Cap_{i}(t-1)\,\pm J\,]\,}

with t the moment of calculation; Cap the free float market cap of a specific listing and J a coefficient used to adjust the index on the back of capital increases or other corporate actions so as to ensure continuity. The formula can be adjusted to accommodate changes in index structure, such as the temporary suspension of companies pending news.

[edit] Components

As of the temporary suspension of Sogecable on 12 May 2008 pending the conclusion of a takeover offer from Prisa.[13]

Banco Santander branch in Barcelona.
Banco Santander branch in Barcelona.
An Iberia Airbus A319-100.
An Iberia Airbus A319-100.
A branch of Inditex's Zara chain in Hong Kong.
A branch of Inditex's Zara chain in Hong Kong.
A Unión Fenosa wind turbine in León province, Spain.
A Unión Fenosa wind turbine in León province, Spain.
Company IGBM sector Ticker symbol Index weighting (%)1
Abengoa engineering and others ABG 0.33
Abertis car parks and motorways ABE 2.27
Acciona construction ANA 1.90
Acerinox minerals, metals and transformation ACX 0.95
ACS construction ACS 2.82
Banco Popular banks POP 2.85
Banco Sabadell banks SAB 1.68
Banco Santander banks SAN 18.30
Banesto banks BTO 0.35
Bankinter banks BKT 0.81
BBVA banks BBVA 11.75
BME investment services BME 0.58
Cintra car parks and motorways CIN 0.70
Criteria CaixaCorp portfolio and holding CRI 1.28
Enagás electricity and gas ENG 0.96
Endesa electricity and gas ELE 0.34
FCC construction FCC 0.76
Ferrovial construction FER 1.26
Gamesa capital goods GAM 1.61
Gas Natural electricity and gas GAS 2.08
Grifols pharmacy products GRF 0.80
Iberdrola electricity and gas IBE 9.76
Iberdrola Renovables renewable energy IBR 0.78
Iberia transport and distribution IBLA 0.48
Inditex textiles, clothing and shoes ITX 2.72
Indra electronics and software IDR 0.60
Mapfre insurance MAP 0.67
Red Eléctrica electricity and gas REE 1.19
Repsol YPF petrol REP 6.72
Sacyr Vallehermoso construction SYV 0.54
Técnicas Reunidas engineering and others TRE 0.61
Telecinco communication and publicity TL5 0.36
Telefónica telecommunications and others TEF 19.04
Unión Fenosa electricity and gas UNF 2.14

Note 1: - After adjustment to remove Sogecable at close on 9 May 2008.
Source - Index constituents of IBEX 35 at the closing of: 09/05/2008 after adjustment, Sociedad de Bolsas.

[edit] References

  1. ^ Index constituents of IBEX 35 at the closing of: 28/12/2007 after adjustment. Sociedad de Bolsas (28 December 2007). Retrieved on 2008-01-26.
  2. ^ Homepage. Mercado Español de Futuros Financieros. Retrieved on 2008-01-26.
  3. ^ "(Spanish) El Ibex 35 celebra su 15º cumpleaños con una revalorización superior al 400%", El Mundo, 15 January 2007. Retrieved on 2008-01-21. 
  4. ^ a b c d e Technical Regulations for the Composition and Calculation of the Sociedad De Bolsas, S.A. Indexes. Sociedad de Bolsas. Retrieved on 2008-01-27.
  5. ^ 5-year comparison chart of Xetra DAX, IBEX 35, CAC 40, FTSE 100 and DJIA. Yahoo! Finance. Retrieved on 2007-12-28.
  6. ^ Smyth, Sharon. "Around the Markets: Spanish stock market could become victim of its own success", Bloomberg, International Herald Tribune, 9 January 2007. Retrieved on 2008-01-27. 
  7. ^ "(Spanish) Récord para el Ibex: Santander hizo saltar la sesión por los aires", eleconomista.es, 8 November 2007. Retrieved on 2008-01-27. 
  8. ^ Historical prices of IBEX 35. Yahoo! Finance. Retrieved on 2007-12-28.
  9. ^ "(Spanish) El Ibex 35 pierde un 7,5% y registra la mayor caída de toda su historia", El Mundo, 21 January 2008. Retrieved on 2008-01-21. 
  10. ^ "(Spanish) El Ibex gana un 6,95%, la mayor subida de su historia", El País, 24 January 2008. Retrieved on 2008-01-24. 
  11. ^ a b c d e TEN KEY QUESTIONS ABOUT IBEX 35. Sociedad de Bolsas. Retrieved on 2008-01-27.
  12. ^ Notice from the Technical Advisory Committee of the IBEX indices regarding changes to the Technical Regulations for the Composition and Calculation of the Indices. Sociedad de Bolsas (17 April 2008). Retrieved on 2008-04-18.
  13. ^ Notice from the Technical Advisory Committee of the IBEX® Indices concerning Sogecable, S.A. (SGC). Sociedad de Bolsas (6 May 2008). Retrieved on 2008-05-12.

[edit] External links