The flagship stock index of the Paris Stock Exchange, the CAC 40, reached Monday a number of points higher than that of its London counterpart, the FTSE 100, a first since 2000 which underlines the difficulties of the British place.
With a peak at 7,340.55 points at 3:47 p.m., the CAC 40 exceeded Friday’s closing level of the FTSE 100 (7,338.58 points) on the London Stock Exchange, closed Monday due to a public holiday. To find such a situation, we have to go back to November 2000, at the beginning of the bursting of the internet bubble. The period of the internet bubble is also the only one during which the CAC 40 overtook the main index of the London Stock Exchange for a long time.
The City had regained the lead and the gap had widened after the 2007 crisis and during the 2010 decade, peaking at around 2,600 points in October 2016. The trend has since reversed: the CAC 40 has flown from record after record, thanks in particular to the performance in Paris of the luxury sector since the pandemic, while the London Stock Exchange has stagnated or progressed only much more timidly since the Brexit referendum.
Unlike the Dax of the Frankfurt Stock Exchange, the two indices operate without taking into account the dividends paid. The comparison is therefore easier. The two indices are however different in the number of companies they include, but also in their reference date: the FTSE started out worth 1,000 points in 1984, when the CAC 40 index launched from the same starting line, but four years later.
In addition, “their constitution is not the same,” recalls Philippe Cohen, portfolio manager at Kiplink Finance. “Each clue has its own story. The CAC 40 has evolved so much in its constitution. At one point it was very tech, then banking and now luxury. Over 30 years it is difficult to compare,” he continues.
The rebalancing between London and Paris in finance is materializing in other aspects: in November 2022, the Paris market as a whole passed the City of London for the first time in terms of market capitalization of companies listed there. . Paris has also managed to take advantage of Brexit to attract 5,500 jobs in the financial sector, according to Choose Paris Region, which is notably in charge of promoting Île-de-France.