The IBEX 35 constantly monopolizes the economic news of our country. News about the daily price, forecasts and changes in the composition of the IBEX 35 are a constant in the media. But, what exactly is the IBEX 35 and why is it so important? In this article, we tell you everything you need to know about the main indicator of the Spanish Stock Exchange.
The IBEX 35 is the national and international benchmark index of the Spanish stock market. It is made up of the 35 companies, regardless of size and sector to which they belong, with the most liquidity and most traded that are listed on the Stock Exchange Interconnection System (SIBE), the electronic trading platform for equity securities that directly communicates the four Spanish stock exchanges (Madrid, Barcelona, Bilbao and Valencia). These companies represent a wide range of sectors, from oil and energy to consumer goods and financial services. Its main objective is to offer an overview of the state of the Spanish Stock Exchange and serve as the underlying asset for investment products.
The origin of the IBEX 35
In 1991, the Sociedad de Bolsas considered the need to create a representative index of the Continuous Market due to the growing importance of the latter with respect to the total equity traded in Spain and the lack of an index on which derivative products could be traded in the market, given how advanced this project was by MOFEX. With this objective, the governing body of the Stock Exchange Interconnection System (SIBE) decided to acquire the two existing indices, FIEX 35 and MEFF 30, and continue with the FIEX 35 series, changing its name to IBEX 35. On January 14, 1992, the birth date of the options and futures market, the Sociedad de Bolsas began to disseminate it as its own.
What companies make up the IBEX 35?
These are the companies that make up the IBEX 35 as of the beginning of January 2024:
- Acciona (Basic Materials, Industry and Construction)
- Acciona Energía (Oil and energy)
- Acerinox (Basic Materials, Industry and Construction)
- ACS Actividades de Construcción y Servicios (Basic Materials, Industry and Construction)
- AENA (Consumer Services)
- Amadeus IT Group (Technology and Telecommunications)
- ArcelorMittal (Basic Materials, Industry and Construction)
- Banco Santander (Financial services)
- Banco Sabadell (Financial services)
- Bankinter (Financial services)
- Banco Bilbao Vizcaya Argentaria (BBVA) (Financial services)
- CaixaBank (Financial services)
- Cellnex Telecom (Technology and Telecommunications)
- Enagás (Oil and energy)
- Endesa (Oil and energy)
- Ferrovial (Basic Materials, Industry and Construction)
- Fluidra (Basic Materials, Industry and Construction)
- Grifols Clase A (Consumer goods)
- International Consolidated Airlines Group (Consumer Services)
- Iberdrola (Oil and energy)
- Inditex (Consumer goods)
- Indra (Technology and Telecommunications)
- Inmobiliaria Colonial (Real estate services)
- Logista (Consumer Services)
- MAPFRE (Financial services)
- Meliá Hotels International (Consumer Services)
- Merlin Properties (Real estate services)
- Naturgy Energy Group (Oil and energy)
- Redeia Corporación (Oil and energy)
- Repsol (Oil and energy)
- Laboratorios Rovi (Consumer goods)
- Sacyr (Basic Materials, Industry and Construction)
- Solaria Energía y Medio Ambiente (Oil and energy)
- Telefónica (Technology and Telecommunications)
- Unicaja Banco (Financial services)
How often is the IBEX 35 reviewed?
The Technical Advisory Committee (CAT) of the IBEX 35, which is made up of a minimum of 5 and a maximum of 9 members (prestigious experts from the financial and academic world), meets every six months (in June and December) on a regular basis, with the aim of examining the 35 most liquid companies on the Spanish Stock Exchange and redefining the index in the next period. In addition, they also hold two quarterly follow-up meetings, which take place in March and September, to review the composition of the IBEX 35 and the number of shares of each company taken to calculate the value of the index (coefficient applied based on the floating capital of each company). In this way, the IBEX 35 is reviewed a total of four times a year, since the values that make up the index are subject to constant changes.
How is the IBEX 35 calculated?
From a technical point of view, the IBEX 35 is an index weighted by market capitalization (price per share multiplied by the number of shares in circulation) and adjusted by free float (percentage of a company's shares that are traded on the stock market on a regular basis). With this in mind, the total value of the market capitalizations of free float of the 35 companies is first calculated to determine the weightings of the companies. Next, the weighting of each company is calculated by dividing its market capitalization of free float by the sum of market capitalizations of all the companies that make up the IBEX 35. Finally, to calculate the level of the index, the total market capitalization of free float of the 35 companies is divided by the same value during a reference period and then multiplied by the level of the index corresponding to that base period.
