THE VCOMV CAC 40 SURVEY:

DECISIVE CONCLUSIONS

THE CAC 40 OF AN OLD EUROPE AND ITS AGING INDUSTRY

The CAC 40 has had thirty years in 2017.
Within the space of two years, the format of the CAC 40 has changed a little in terms of modernity (arrivals of DASSAULT SYSTEMES and STMICROELECTRONICS).

For all of that, the current CAC 40 reflects how old Europe and its industry are. Therefore, taking the CAC 40 into the 21st Century would be a logical move: the CAC 40 is currently not conveying enough modernity to be totally relevant in today’s New Economy.

A BREATH OF FRESH AIR

More than half of the 40 biggest US companies are under 40 years old ! In France, only DASSAULT SYSTEMES.

In terms of market capitalization, the four biggest companies on the New York Stock Exchange are (from the 11/03/19) MICROSOFT, APPLE, AMAZON and ALPHABET (ex Google), GOOGLE, MICROSOFT and FACEBOOK ; what a contrast with their Paris Stock Exchange counterparts: LVMH, TOTAL, L’OREAL and SANOFI!

Possible evolutions

There are two criteria for new entrants to the CAC 40: market capitalization and the amount of free float, i.e. shares that are likely to be actually traded on the stock exchange.

By combining these two criteria (market capitalization and free float), 3 stocks are clearly eligible for inclusion in the Paris index:

At 1/03/19

Market capitalization
(in billions of Euros)

% of free float

EDENRED

9,28

100

TELEPERFORMANCE

9,53

100

THALES

22,83

46,75

 

If the Index Scientific Committee – the board of experts in charge of selecting new entrants – really wanted to ensure that the CAC 40 is the “club” of leading stock exchange securities, the return of THALES would obviously give the CAC 40 a significant boost of modernity.

 

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