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20-09-2019 : The composition of stock market indices over the past 35 years

    A few days ago Marks and Spencer's exited from the London Stock Exchange's flagship index, the FT 100, and since its inception in 1984, only just over a quarter of the original constituents are still members of this club. Two thirds were acquired by other groups (Cadbury Schweppes, Blue Circle, Scottish & Newcastle, General Accident, Ladbrokes, GEC, etc.), which confirms that on the London stock exchange everything is potentially for sale as long as the price is there. Only one group went bankrupt.   On this occasion, a look back on the CAC 40, the flagship index of the Paris Stock Exchange, does not show a very different evolution. Created in 1988, only 15 of the 40 original components are still present. 2 exited from it by marginalization and then went bankrupt (Pechelbronn, Sequana's ancestor, and Crédit Foncier), 16 were acquired (Lafarge, Paribas, Alcaltel, Darty, Club Med, etc.), 4 became too small to remain there (Hachette, Chargeurs, CGIP and Casino) and 3 were heavily restructured (Compagnie Générale des Eaux, Compagnie Générale d'Electricité and Thomson CSF).   Brexit or not Brexit, a common lesson for groups: Adapt or die.   Have a nice day.

20-09-2019 : The composition of stock market indices over the past 35 years

The composition of stock market indices over the past 35 years A few days ago, Marks & Spencer exited from the London Stock Exchange's flagship index, the FT 100, and since its inception in 1984, only just over a quarter of the original constituents are still members of this club. Two thirds were acquired by other groups (Cadbury Schweppes, Blue Circle, Scottish & Newcastle, General Accident, Ladbrokes, GEC, etc.), which confirms that on the London stock exchange everything is potentially for sale as long as the price is there. Only one group went bankrupt. On this occasion, a look back on the CAC 40, the flagship index of the Paris Stock Exchange, does not show a very different evolution. Created in 1988, only 15 of the 40 original components are still present. 2 exited from it by marginalization and then went bankrupt (Pechelbronn, Sequana's ancestor, and Crédit Foncier), 16 were acquired (Lafarge, Paribas, Alcaltel, Darty, Club Med, etc.), 4 became too small to remain there (Hachette, Chargeurs, CGIP and Casino) and 3 were heavily restructured (Compagnie Générale des Eaux, Compagnie Générale d'Electricité and Thomson CSF). Brexit or not Brexit, a common lesson for groups: adapt or die. Have a nice day.  



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The Vernimmen.com Letter

Number 122 of September 2019

News : What's wrong with new accounting rules regarding operating leases

Statistics : The valuation of small listed companies

Research : An empirical assessment of agency conflicts

Q&A : Two questions regarding shareholder loans

COMMENTS : Comments posted on Facebook