IBEX 35

Infobox Index
name = IBEX 35

foundation = 1992
operator = Bolsas y Mercados Españoles
exchanges = Bolsa de Madrid
constituents = 35
cap_level = Large cap
mc
€ 527.6 billion (2007) [cite web
url=http://www.ibex35.com/findiai/historico/i20071228.pdf
title=Index constituents of IBEX 35 at the closing of: 28/12/2007 after adjustment
date=28 December, 2007
accessdate=2008-01-26
publisher=Sociedad de Bolsas|format=PDF]
weighting = Market value-weighted
related = Madrid General Index
homepage = [http://www.ibex35.com www.ibex35.com]

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. [cite web
accessdate=2008-01-26
title=Homepage
url=http://www.meff.es/ing/indexi.htm
publisher=Mercado Español de Futuros Financieros]

History

The IBEX 35 was inaugurated on 14 January 1992, [cite news
date=15 January, 2007
accessdate=2008-01-21
title=es icon El Ibex 35 celebra su 15º cumpleaños con una revalorización superior al 400%
url=http://www.elmundo.es/papel/2007/01/15/economia/2072695.html
publisher=El Mundo] although there are calculated values for the index back to 29 December 1989, where the base value of 3,000 points lies.cite web
publisher=Sociedad de Bolsas
url=http://www.sbolsas.com/data/normdef-in.pdf
title=Technical Regulations for the Composition and Calculation of the Sociedad De Bolsas, S.A. Indexes
accessdate=2008-01-27|format=PDF]

Since the turn of the century, the index has outperformed many of its Western peers, [cite web
url=http://finance.yahoo.com/charts#chart7:symbol=^gdaxi;range=5y;compare=^dji+^ibex+^fchi+^ftse;indicator=volume;charttype=line;crosshair=on;logscale=on;source=undefined
title=5-year comparison chart of Xetra DAX, IBEX 35, CAC 40, FTSE 100 and DJIA
publisher=Yahoo! Finance
accessdate=2007-12-28] driven by relatively strong domestic economic growth which has particularly helped construction and real estate stocks. [cite news
first=Sharon
last=Smyth
work=Bloomberg
date=9 January, 2007
accessdate=2008-01-27
title=Around the Markets: Spanish stock market could become victim of its own success
url=http://www.iht.com/articles/2007/01/08/bloomberg/bxatm.php
publisher=International Herald Tribune] 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. [cite news
date=8 November, 2007
accessdate=2008-01-27
title=es icon Récord para el Ibex: Santander hizo saltar la sesión por los aires
url=http://www.eleconomista.es/mercados-cotizaciones/noticias/310024/11/07/Record-para-el-Ibex-Santander-hizo-saltar-la-sesion-por-los-aires.html
publisher=eleconomista.es] [cite web
url=http://finance.yahoo.com/q/hp?s=%5EIBEX
title=Historical prices of IBEX 35
publisher=Yahoo! Finance
accessdate=2007-12-28]

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, [cite news
date=21 January, 2008
accessdate=2008-01-21
title=es icon El Ibex 35 pierde un 7,5% y registra la mayor caída de toda su historia
url=http://www.elmundo.es/mundodinero/2008/01/21/economia/1200933104.html
publisher=El Mundo] and rose a record 6.95% three days later. [cite news
date=24 January, 2008
accessdate=2008-01-24
title=es icon El Ibex gana un 6,95%, la mayor subida de su historia
url=http://www.elpais.com/articulo/economia/Ibex/gana/695/mayor/subida/historia/elpepueco/20080124elpepueco_5/Tes
publisher=El País]

Rules

election

The composition of the IBEX 35 is reviewed twice per year (in June and December)cite web
publisher=Sociedad de Bolsas
url=http://www.ibex35.com/IndicesIBEX_10IBEX35_EN.asp
title=TEN KEY QUESTIONS ABOUT IBEX 35
accessdate=2008-01-27] 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". If any changes are made, they are effected on the first trading day of July or January. 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. Any candidate stock must also have either been traded on at least a third of all trading days in the previous six months, or rank in the top twenty overall in market cap [cite web |date=17 April, 2008 |accessdate=2008-04-18 |title=Notice from the Technical Advisory Committee of the IBEX indices regarding changes to the Technical Regulations for the Composition and Calculation of the Indices |url=http://www.sbolsas.com/ing/ficheros/documentos/comiteasesor/AC05-08en.pdf |publisher=Sociedad de Bolsas|format=PDF] (thus allowing large recently IPO'ed companies to be included).

Weighting

The IBEX 35 is a market value-weighted index. 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. Any company with 50% or more of its shares considered free float is given a free float factor of 1. Unlike many other European benchmark indices, the weightings of companies in the IBEX 35 are not capped.

Calculation

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

$I(t)\; =\; I(t-1)\; imesfrac\{sum\_\{i=1\}^\{35\}\; Cap\_\{i\}(t),\}\{\; [,sum\_\{i=1\}^\{35\}\; Cap\_\{i\}(t-1),pm\; J,]\; ,\}$

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.

Components

As of the bi-annual review effective 1 July, 2008, where Sogecable was replaced with Obrascón Huarte Lain. [cite web
date=10 June, 2008
accessdate=2008-07-01
title=Results of the first ordinary review of the Technical Advisory Committee of the IBEX 35® Index
url=http://www.sbolsas.com/ing/ficheros/documentos/comiteasesor/AC09-08en.pdf
publisher=Sociedad de Bolsas|format=PDF]

fnb|1 - After bi-annual adjustment at close on 30 June 2008.
Source - [http://www.sbolsas.es/findiai/historico/i20080630.pdf Index constituents of IBEX 35 at the closing of: 30/06/2008 after adjustment] , Sociedad de Bolsas.

References

External links

* [http://www.ibex35.com/ Official IBEX 35 information site]
* [http://www.bolsamadrid.es/ing/mercados/acciones/accind1_1.htm IBEX 35 composition and prices from the Bolsa de Madrid]