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FTSE 100 Index (FTSE)

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Behemoths will decide whether Footsie reaches 6,000 level
Financial Times  Oct 22  Comment 
Given the lack of demand for equities, gains will depend to a large extent on the de-equitisation trade and whether mega caps start share buy-backs
Reckitt finance boss to leave after adding to non-executive interests
guardian.co.uk  Oct 22  Comment 
Colin Day to leave the household goods maker over fears that his outside workload is detracting from his focus on the firm Reckitt Benckiser, the household goods group, is to remove finance director Colin Day, who has been with the company for 10...
Data Points: Europe
Wall Street Journal  Oct 22  Comment 
This week, the FTSE 100 gained 38.00 points, or 0.67% to 5741.37 and the Stoxx Europe 600 added 0.92 points, or 0.35% to 266.75.
BG boosted by Australian approval and Tanzanian discovery, but FTSE 100 falters
guardian.co.uk  Oct 22  Comment 
There was a double dose of good news for energy group BG. Firstly the Australian government approved its $15bn coal-seam gas project in Queensland, albeit with a number of conditions which could inflate costs. The approval came as a relief to...
Micro Focus leads FTSE 250 risers on takeover talk
guardian.co.uk  Oct 22  Comment 
Both the FTSE 100 and the FTSE 250 are edging lower, but the mid-cap index is turning in the better performance, helped by bid speculation surrounding business software group Micro Focus. The company's shares have jumped 27.5p to 410p - a 7% rise...
FTSE retreats from 6-month peak, hurt by miners
Reuters  Oct 22  Comment 
Britain's top share index fell on Friday, retreating from a six-month closing high in the previous session as mining stocks slipped following recent strong gains.
Legal & General issues surprise update after accidentally emailing figures to analysts
guardian.co.uk  Oct 22  Comment 
Oops. Nearly two weeks ahead of schedule Legal and General has issued third quarter figures after mistakenly sending them out to analysts in an email yesterday evening. For a FTSE 100 company to make such a mistake is embarassing in the extreme,...
AIA flotation takes centre stage
Financial Times  Oct 22  Comment 
Softer global commodity prices weigh on resource stocks as equities slip to first weekly losses in two months, but AIA flotation defies downward trend




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 This article describes an index that measures the performance of an exchange, industry or a geographic region. View articles referencing this index.
 
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Sr. Director
Advait Pandey


Also called the footsie, the Financial Times Stock Exchange 100 is a market capitalization weighted index representing the top 100 blue chip companies on the London Stock Exchange. The index is said to map more than 80% of the total capitalization in the United Kingdom. Stocks are free-float weighted to ensure that only the investable opportunity set is included within the index. [1]. The FTSE group manages the Index, which in turn is a joint venture between the Financial Times and the London Stock Exchange.

Weighting and Calculations

They involve the total market capitalization of the companies weighted by their effect on the index, so the larger stocks would make more of a difference to the index as compared to a smaller market cap company. This is also called the free float method. The basic formula for any index is (be it capitalization weighted or any other stock index)[2]:

  • Index level= Σ(Price of stock* Number of shares)*Free float factor/ Index Divisor.

The Free float Adjustment factor represents the proportion of shares that is freefloated as a percentage of issued shares and then its rounded up to the nearest mulitple of 5% for calculation purposes. To find the free-float capitalization of a company, first find its market cap (number of outstanding shares x share price) then multiply its free-float factor. The free-float method, therefore, does not include restricted stocks, such as those held by company insiders.

While one might track this portfolio’s value in dollar terms, it would probably be an unwieldy number – for example, the S&P 500 market value is roughly $11.8 trillion. Rather than deal with ten or more digits, the figure is scaled to a more easily handled number, currently around 1250. Dividing the portfolio market value by a factor, usually called the Index divisor, does the scaling.

Continuity in index values is maintained by adjusting the divisor for all changes in the constituents’ share capital after the base date. This includes additions and deletions to the index, rights issues, share buybacks and issuances, and spin-offs. The divisor’s time series is, in effect, a chronological summary of all changes affecting the base capital of the index. The divisor is adjusted such that the index value at an instant just prior to a change in base capital equals the index value at an instant immediately following that change[3].

Composition of the FTSE 100

The List of companies that comprise the FTSE as of 16th October 2008[4]

  1. 3i
  2. Admiral Group
  3. Alliance Trust
  4. AMEC
  5. Anglo American (AAUK)
  6. Antofagasta (ANTO-LN)
  7. Associated British Foods
  8. AstraZeneca plc (AZN-LN)
  9. Autonomy Corporation
  10. Aviva
  11. BAE Systems (BAESY)
  12. BG Group PLC (BRGYY)
  13. BHP Billiton (BHP)
  14. BP (BP)
  15. BT GROUP (BT)
  16. Barclays (BCS)
  17. British Airways ADR (BAIRY)
  18. British American Tobacco Industries (BTI)
  19. British Energy (BGY-LN)
  20. British Land
  21. British Sky Broadcasting Group (BSY)
  22. Bunzl (BNL)
  23. Cable & Wireless
  24. Cadbury Schweppes (CSG)
  25. Cairn Energy
  26. Capita Group
  27. Carnival (CCL)
  28. Centrica
  29. Cobham
  30. Compass Group
  31. Diageo (DEO)
  32. Drax Group
  33. Eurasian Natural Resources Corporation
  34. Experian PLC (EXPN-LN)
  35. Firstgroup PLC (FGP-LN)
  36. Fresnillo
  37. Friends Provident
  38. G4S
  39. GlaxoSmithKline (GSK)
  40. Heritage Financial Group (HBOS)
  41. HSBC Holdings (HBC)
  42. Hammerson
  43. ICAP
  44. Imperial Tobacco Group (ITY)
  45. Inmarsat
  46. Intercontinental Hotels Group (IHG)
  47. International Power (IPR)
  48. Invensys
  49. Johnson Matthey (JMAT)
  50. Kazakhmys (KAZ-LN)
  51. Kingfisher
  52. Land Securities
  53. Legal & General
  54. Liberty International
  55. Lloyds Tsb Group (LYG)
  56. London Stock Exchange Group PLC (LSE-LN)
  57. Lonmin
  58. Man Group
  59. Marks & Spencer
  60. Morrisons
  61. National Grid Transco (NGG)
  62. Next
  63. Old Mutual PLC (OML-LN)
  64. Pearson (PSO)
  65. Petrofac
  66. Prudential Financial (PRU)
  67. RSA Insurance Group
  68. Reckitt Benckiser
  69. Reed Elsevier (RUK)
  70. Rexam (REXMY)
  71. Rio Tinto (RTP)
  72. Rolls Royce
  73. Royal Bank of Scotland
  74. Royal Dutch Shell (RDS'A)
  75. SABMiller plc (SBMRY)
  76. Sage Group
  77. TheJama Holding
  78. Sainsbury
  79. Schroders
  80. Scottish and Southern Energy
  81. Severn Trent
  82. Shire Pharmaceuticals Group
  83. Smith & Nephew
  84. Smiths Group
  85. Stagecoach Group
  86. Standard Chartered PLC (STAN-LN)
  87. Standard Life
  88. Tesco (TESO)
  89. Thomas Cook
  90. Thomson Reuters Corporation (TRI)
  91. TUI Travel
  92. Tullow Oil
  93. Unilever (UL)
  94. United Utilities (UU)
  95. Vedanta Resources
  96. Vodafone AirTouch Public Limited Company (VOD)
  97. WPP Group (WPPGY)
  98. Whitbread
  99. Wolseley PLC (WOS-LN)
  100. Wood Group
  101. Xstrata PLC (XTA-LN)

References

  1. ↑ FTSE Factsheet
  2. ↑ Capitlization method methodology
  3. ↑ Capitalization Weighted Description
  4. ↑ FTSE 100 index companies
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