The FTSE MIB index represents the 40 most capitalized and liquid Italian companies listed on the Euronext Milan and Euronext MIV Milan markets. This index is the main benchmark of the Italian stock exchange and provides a comprehensive view of the performance of the Italian stock market, including key companies in different sectors. The FTSE MIB is calculated in real time during the trading day and is a significant indicator for investors and analysts, as it encompasses the major listed companies, which together make up about 80 percent of the total capitalization of the Italian Stock Exchange.
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History and composition of the FTSE MIB index.
The FTSE MIB index was created to replace the MIB 30, taking as its basis its closing value of 10,644 points on October 31, 2003. The historical performance of this index, however, is calculated back to 1997, when the index had a value of 24,402 points. This representative value is a market benchmark and is used to understand upward trends and downward moments in the Italian economy. The index includes a balanced sector representation, thanks to a selection of stocks by capitalization and liquidity, and each stock is weighted by free float-adjusted market capitalization, with a maximum limit of 15 percent per individual stock.
Operation and periodic review of the index
The FTSE MIB is subject to quarterly revisions held on the Monday following the third Friday in March, June, September, and December. During these revisions, the composition of stocks is rebalanced based on changes in capitalization and liquidity, allowing the basket to remain up-to-date. There are, in addition, extraordinary revisions, carried out when there are significant changes in corporate structure, such as mergers, spin-offs, delisting, and major changes in the free float or number of shares. This approach ensures that the index remains an accurate representative of the Italian stock market, adapting to changes in the market.
Characteristics and importance of the FTSE MIB
Being a price index, the FTSE MIB does not include dividends distributed by companies included in the index calculation. This makes it a benchmark tool for assessing market fluctuations due solely to changes in stock prices. Companies included in the FTSE MIB index are chosen based on strict criteria of liquidity and capitalization and include key sectors of the Italian economy. The index measures the overall performance of the Italian stock market and makes it possible to monitor the performance of major companies in a single representation, thus proving to be a key indicator for investors, analysts and economic operators.
The FTSE MIB thus represents the thermometer of the Italian economy, providing investors with a picture of the major Italian companies and their market movements.
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Giuseppe Fontana
I am a graduate in Sport and Sports Management and passionate about programming, finance and personal productivity, areas that I consider essential for anyone who wants to grow and improve. In my work I am involved in web marketing and e-commerce management, where I put to the test every day the skills I have developed over the years.
