FT Index Essay ⋆ Business Essay Examples ⋆ EssayEmpire

The FTSE (pronounced “footsie”), or the Financial Times Stock Exchange Index, is a share index of the 100 most highly capitalized companies on the London Stock Exchange, and is maintained by the FTSE Group, an independent group that originated as a joint venture between the LSE and the Financial Times, a United Kingdom–based newspaper. The FTSE replaces the FT 30, which measured the daily movement of 30 major stocks on the LSE, as the most used index of the British stock market.

The FT 30 (also known as the FT Ordinary or the FT Index) is now largely obsolete, more than 70 years after its establishment in 1935 in the wake of financial reorganization that followed the worldwide depression. Imperial Tobacco and Rolls Royce are the only original FT 30 companies now listed on the FTSE.

The Financial Times predates the FT 30, naturally, by almost 50 years. Established in 1888, when Britain’s economy was still the dominant economy in the world, it declared itself “The Friend of the Honest Financier and the Respectable Broker,” and was originally distributed only in the financial community of London. In contrast with the older Financial News, the Times was intended to be reliable, conservative, even printing on pink paper, which was cheaper than white. The two papers merged in 1945, keeping the FT name while the News’s editorial staff was cherry-picked to create a stronger paper. Beginning in the 1970s, it expanded internationally, publishing three international editions from 23 locations. It was the first British paper to sell more copies internationally than domestically. FT.com was launched in 1995, and the FT indices are updated online hourly.

The first FTSE, the FTSE All-Share Index, was created in 1962, tracking at least 98 percent of the full capital value of all qualified stocks (those that are listed on the London Stock Exchange and meet various inclusive eligibility requirements). The FTSE 100 was introduced in 1982, and in 1995, the FTSE Group became an independent company, opening several overseas offices. It also maintains the FTSE 250 and 350 (the 250 largest and 350 largest stocks on the exchange, respectively), the FTSE SmallCap (tracking the companies outside the FTSE 350), and the FTSE AIM All-Share, 100, and UK 50, which track companies in the LSE’s Alternative Investment Market.

The 100 companies on the FTSE 100 are subject to change every quarter. As of summer 2008, the list is 3i, Admiral Group, Alliance Trust, AMEC, Anglo American, Antofagasta, Associated British Foods, AstraZeneca, Aviva, BAE Systems, BG Group, BHP Billiton, BP, BT Group, Barclays Bank, British Airways, British American Tobacco, British Energy Group, British Land Company, British Sky Broadcasting Group, Bunzl, Cable & Wireless, Cadbury plc, Cairn Energy, Capita Group, Carnival, Carphone Warehouse, Centrica, Cobham, Compass Group, Diageo, Drax Group, Enterprise Inns, Eurasian Natural Resources Corporation, Experian, Ferrexpo, FirstGroup, Friends Provident, G4S, GlaxoSmithKline, HBOS, HSBC, Hammerson, ICAP, ITV, Imperial Tobacco, InterContinental Hotels Group, International Power, Invensys, Johnson Matthey, Kazakhmys, Kingfisher, Land Securities Group, Legal & General, Liberty International, Lloyds TSB, London Stock Exchange Group, Lonmin, Man Group, Marks & Spencer, Wm Morrison Supermarkets, National Grid, Next, Old Mutual, Pearson, Petrofac, Prudential, RSA Insurance Group, Reckitt Benckiser, Reed Elsevier, Rexam, Rio Tinto Group, Rolls-Royce Group, Royal Bank of Scotland Group, Royal Dutch Shell, SABMiller, Sage Group, J Sainsbury, Schroders,

Scottish and Southern Energy, Severn Trent, Shire Pharmaceuticals Group, Smith & Nephew, Smiths Group, Standard Chartered Bank, Standard Life, Tesco, Thomas Cook Group, Thomson Reuters, TUI Travel, Tullow Oil, Unilever, United Utilities, Vedanta Resources, Vodafone, WPP Group, Whitbread, Wolseley, Wood Group, Xstrata.

Bibliography:

Kevin Boakes, Reading and Understanding the Financial Times (Financial Times Prentice Hall, 2008);
FTSE, www.ftse.com (cited March 2009);
“The New FTSE 250 Club,” Accountancy (v.141/1375, 2008).

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