When speaking of Ibex 35, it is necessary to indicate that Spain has recently shown quite an outstanding stock market activity. Its highest stock market body is made up of 4 stock exchanges. The Madrid, Barcelona, Valencia Stock Exchange, and the Bilbao Stock Exchange make up the SIBE or Spanish Stock Market Interconnection System for its acronym.
The Ibex 35 is, therefore, the stock index used in the Spanish market. Its preparation is in charge of the Spanish Stock Exchange and Market (BME). It is made up of several 35 companies, which have the highest number of liquidity and listing on the aforementioned stock exchanges.
This index is derived based on market capitalization, just like the S&P 500 or companies with different weights, which makes it a very flexible index.
Ibex 35 already has 29 years of history, and it began operations on January 14, 1992. Nevertheless, it has faced some episodes, both positive and negative, which we will detail below.
Let’s start by mentioning the highest peak that the Ibex 35 has shown since its launch in 1992. On May 10, 2010, it reached a 14.43% rise, going from 9065.10 to 10,351.90 points.
This movement occurred after the crisis in some European countries approved the rescue plan for the European market. When this happened, the second-worst week in the index’s history had occurred, the first being in October 2008. There the fall was 21.20% in just 5 days.
On the other hand, its lowest peak is in closer times, in 2020 thanks to the Covid-19 pandemic; on March 12, there was a drop of 14.06%. However, compared to the biggest drop in the history of the Ibex 35, it is somewhat less weighty; in 2008, it registered its worst fall, being this of 39.4% in the value of its shares.
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Like other indices such as the S&P 500, the choice of the values that enter or exit the index is chosen by a specialized committee called the Technical Advisory Committee (CAT). This committee meets twice a year.
The main characteristics that are taken into account to be part of the Ibex 35 are:
- Higher than 0.30% should be the average capitalization of the company; this in the period of time used for the evaluation.
- Having hired at least a third of the sessions of the period evaluated by the CAT.
As a final comment, the limit is 35 companies that make up the Ibex 35; on some occasions, it has been made up of one more or one less number (36 and 34). The sectors that make up the Ibex35 are varied. Some of them are Steel, Engineering, Chemical, Finance, Food, telecommunications, Media, energy, and more.