The IBEX 35:
The meaning and purpose of the IBEX 35 is, a "summary" of the prices of the most representative companies of the Spanish economy. The Ibex has been in operation since January 1992.
To make it easier to understand, if we were asked, for example, if the price of shares of Spanish companies has risen or has dropped, we could do two different things:
1. We could make a list with each of the companies in Spain, which would certainly be an almost endless list, very long: "Telefónica has increased 10%, Bankia has fallen 3%, CaixaBank has fallen, etc ... "
2. Or we could summarize, the most natural summary would be the average. But this summary with the average of all companies would not reflect the real state of the stock market, of the entire market, because there are more important companies and less important companies. Telefónica, for example, is huge, like Banco Santander, while other companies are small. To give a more accurate picture, an index is established, in this case called IBEX 35.
IBEX 35 is the average of all of the companies, where the bigger and more influential companies carry more weight than the smaller ones.
Why is it called the IBEX 35?
It is called IBEX 35 because this index is calculated based on the 35 most relevant companies in Spain, which reflect almost all sectors of the economy, banking, technology, medical products, and so on. And the word IBEX, was originally chosen by Iberia in reference to Spain and the word Index, that is to say, a combination of these two words added to the number 35, in reference to the 35 companies that compose the index.
Twice a year, in December and June, a group of advisors of the IBEX 35, decide which 35 companies will be the ones that will be part of this index. If one of the companies that is part of the index disappears, or begins to have a very negative performance, it is removed from the index, and the company is replaced by another, so that the index remains representative of the Spanish economy.
What does it mean that the IBEX rises or falls?
What does it mean then, when it is said, for example "today the IBEX 35 rose by 4%". This means that on average the most representatives Spanish companies, these 35 Spanish companies, have risen by 4%, always bearing in mind that greater importance is given to large companies, like Telefónica or Santander, and giving less importance to companies which do not have as much market value.
How does it work in other countries?
There are many indexes that are summaries of different groups of companies, usually each country or each stock exchange has its own index. For example, the New York Stock Exchange index, called Dow Jones, is the summary of 30 different industrial companies in the United States. There are other Dow Jones indices of utility companies, of other types. In Japan, for example, there is the Nikkei 225 Index, which is the summary of 225 different Japanese companies.
It should be noted that what is intended to achieve with these indexes, is to represent in a single number a summary of the stock behavior of a group of companies, whether 30 companies, 35, or 225.
Which are the companies on the IBEX 35?
Below we have provided a list of the companies that are currently (remember that companies can change, according to their performance) components of the IBEX 35:
- Abertis Infraestructuras (ABE)
- Acciona (ANA)
- Acerinox (ACX)
- Actividades de Construcción y Servicios (ACS)
- AENA (AENA)
- Amadeus (AMS)
- Arcelor Mittal (MTS)
- Banco de Sabadell (SAB)
- Banco Santander (SAN)
- Bankia (BKIA)
- Bankinter (BKT)
- Banco Bilbao Vizcaya Argentaria (BBVA)
- CaixaBank (CABK)
- Cellnex (CLNX)
- Distribuidora Internacional de Alimentación (DIA)
- Enagás (ENG)
- Endesa (ELE)
- Ferrovial (FER)
- Gamesa Corporación Tecnológica (GAM)
- Gas Natural SDG (GAS)
- Grifols (GRF)
- International Airlines Group (IAG)
- Iberdrola (IBE)
- Inditex (ITX)
- Indra Sistemas (IDR)
- Inmobiliaria Colonial (COL)
- MAPFRE (MAP)
- Mediaset España Comunicación (TL5)
- MERLIN Properties (MRL)
- Red Eléctrica Corporación (REE)
- Repsol (REP)
- Técnicas Reunidas (TRE)
- Telefónica (TEF)
- Viscofan (VIS)
Which are the biggest Spanish companies?
The 5 biggest companies (by market capitalization) are: Inditex, Santander Bank, Telefónica, BBVA Bank and Iberdrola, in that order.
How can I invest in the IBEX 35?
You can invest in the IBEX 35 with AG-Markets, if you are interested or you would like to learn more about it, please, get in touch with us.