CAC 40 index definition
CAC (Cotation Assistée en Continu) 40 index appeared in 1978 and refers to the French reference shareholder index. This index includes the 40 companies with the largest market capitalization listed on the French stock market, regardless of the sector of each. Each of its constituents presents in the index different weights according to its market capitalization, being that the maximum weight of each is 15%.
With the development of financial derivatives, such as warrants, futures and options, CAC 40 has become, over time, a value in itself, which is negotiable, serving as the underlying asset, ie asset-base, object of several financial derivative contracts.
CAC (Cotation Assistée en Continu) 40 index surgiu em 1978 e designa o índice acionista de referência francês. Este índice engloba as 40 empresas com maior capitalização bolsita cotadas na bolsa de valores no mercado francês, independentemente do setor de cada uma. Cada um dos seus constituintes apresenta no índice pesos diferentes em função da sua capitalização capitalização bolsista, sendo que a ponderação máxima de cada um é de 15%.
Com o desenvolvimento de derivados financeiros, tais como warrants, futuros e opções, o CAC 40 tornou-se, ao longo do tempo, um valor em si mesmo, que é negociável, servindo de ativo subjacente, ou seja, de ativo-base, objeto de vários contratos de derivados financeiros.
Operation and criteria
The CAC 40 index is reviewed quarterly by a committee of experts, so that at all times it is a representative market index that is dynamic and in which there are unforeseeable events such as public offers of acquisition and significant reduction of free float, among other events assets. Whenever a security comes out of CAC 40, it is replaced by another one that is in the CAC Next 20 index, which is viewed as an antechamber to CAC 40, and securities must meet, among others, the following eligibility criteria: liquidity, market capitalization, visibility in the media.
A few of history…
During the early 2000s, a speculative bubble associated with the internet and technology companies, known as the “dot.com bubble” involved the financial markets, and the CAC 40 peaked on September 4, 2000 at 6944.77 session points. Three years later, the financial and geopolitical climate was harsh (speculative attacks and the Iraq war), which dropped the index to 2401.15 points (its lowest level since 1997). There followed a new speculative bubble associated with the real estate market in the USA known as the “subprime bubble”, which caused the CAC 40 index to reach 6168.15 points (session of September 4, 2007), then collapsing, drawing a trajectory unprecedented descent.
