The CAC 40 is the most widely used indicator of the performance of the Paris Stock Exchange. It is made up of the 40 largest and most actively traded companies listed on Euronext Paris.
It is a free float market capitalisation weighted index. The free float amount is based on shares that are available to trade and not held by the government or officers and staff of the company. Weightings are based on market capitalisation.
As of September 2017 the market capitalisation of the index was €1491.7bn with a free float value of €1162.9bn or 78%.
Based in France
To be eligible for the CAC 40 companies have to have a significant presence in France such as a head office or have significant trading volumes in the country. They do not have to be French companies.
Two Dutch companies and one Belgian one are in the CAC 40 at the moment.
Euronext, which also operates stock exchanges in Amsterdam, Brussels and Lisbon, compiles the index and manages it on a day-to-day basis. The index is calculated every 15 seconds during regulated trading hours.
Quarterly reviews of the make-up of the CAC 40 take place in March, June, September and December. At the quarterly review in September 2017 Nokia was replaced by STMicroelectronics.
An annual review of weightings of the companies in the index takes place in September. Weightings are capped at 15% in this review although they will vary throughout the year. Total’s weighting was the highest in the September 2017 review at 9.28%.
Membership of the index is overseen by Le Conseil Scientifique des Indices, an independent body made up of representatives from organisations, including the French market regulator AMF, Banque de France, the national statistics bureau INSEE and economics research centre Rexecode.
Euronext and Le Conseil Scientifique may, exceptionally, decide to deviate from the rankings if it is felt to be in the interest of the users of the index. Guiding principles for such decision are tradability of the index, minimising index turnover and representativeness.
Companies are selected for the index based on a combination of two rankings – the value of regulated turnover over a 12-month period and the free float capitalisation on the cut-off date. After the September 2017 review the biggest companies by weighting were: