The initials Ibex are formed by the union of two words (iberia and index) and refer to the index of the Spanish stock market. The numerical amount that appears associated refers to the 35 companies that make up said stock index.
A stock index is an indicator that reflects the behavior of the stock market and in the case of the Ibex 35 it is based on the 35 companies that are considered significant in the country’s economy, which belong to various sectors of the economy (banking, insurance, energy, textiles, construction, media, etc.).
From the stock market point of view, the Ibex 35 is an index that expresses an average value, so that the value of each day reflected in points communicates the average situation of the 35 companies. This implies that some of the entities may be up while others are down, but the final result reflects an average situation.
The Ibex 35 advisors prepare two annual reports with the intention of establishing possible changes in relation to the 35 companies that comprise it. It must be borne in mind that this index is changing and some companies leave it and others enter. However, large corporations tend to maintain themselves over time. As for the criteria to be part of the Ibex, there are several, the main ones being the size of an entity, its liquidity, the number of shares, the free float and its strategic weight in the national economy.
The Ibex 35 and the operation of the stock market in Spain depend on a regulatory and supervisory body, known by its acronym CNMV (National Securities Market Commission).
The language of the stock market
Shareholders and investors who operate with the Ibex 35 have to familiarize themselves with the specific vocabulary of the stock market. The intermediary is known as a broker, the daily fluctuations are called trading. Timing expresses the evolution of a security over a period.
These examples show that the Ibex 35 and the stock market in general use English as the international language. And it is logical that this is the case, since the stock market is part of the global economy. In this sense, the Ibex 35 of the Madrid stock market is equivalent to other indices (in the Tokyo stock market there is the Nikkei 225, in New York the most representative is the Dow Jones, in Sao Paulo the Bovespa index is used and in Mexico the CPI).
The stock market has its own terminology and circumstances in each type of index. In the case of the Ibex, the 10,000 points are the reference figure for the daily price of the 35 companies. At the same time, the Ibex advisors are part of the Technical Advisory Committee (CAT) and each entity has a certain position in the ranking. When talking about being inside or outside the Ibex, the word selective is used, since a select group of companies is part of the index.
Photos: iStock – Stephiii / baona
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