ISEQ 20 is the main stock index in Ireland . This index traded 20 securities with the highest trading volume ( liquidity ) and greater market capitalization of the Irish Stock Exchange (ISE). The ISE is born from the merger of the stock markets of Cork and Dublin.
This Irish index represents the price variation of the 20 companies that are listed on it and can be considered as a good indicator of the financial health of the Irish economy. Therefore, it serves as a benchmark for the Irish market.
The price of ISEQ 20 began on December 31, 2004 at 1,000 points , which was its starting point, but historical data was calculated since 1997. Since then, it experienced a sharp rise, although later its value plummeted to Cause of the financial crisis of 2008. If you look at the chart, the value in 2004 is not 1,000 points because it is adjusted for dividends.
The quotation prices of the ISEQ 20 are calculated and published every minute throughout the trading hours, which range from 8:00 to 17:15 (local time). The Laspeyres formula is used to calculate the index, as in all indexes weighted by market capitalization .
Selection of ISEQ 20 values
The review and selection of values is a standardized process that is carried out on a quarterly and annual basis . As in all stock indices, there is a criterion to select the values that are included or excluded from them. These criteria are as follows:
- The ISEQ 20 is a stock market weighted index, adjusted by the free-float of each company.
- Volume negotiatedof the titles of the same.
Although these criteria are the main ones to take into account when including or excluding values for ISEQ 20, there are other additional criteria such as:
- Number of transactions made.
- Number of operations executed in the market.
- Price performance.
It is noteworthy that, in relation to the integral values of ISEQ 20, its weighting in the index may amount to a maximum of 20% of it. This prevents a company from having too much weight in the index, which is one of the disadvantages of indexes built by capitalization.
ISEQ 20 index family
In addition to the ISEQ-20 index, there are other indexes related to the Irish market . According to the characteristics of the companies listed in the index, their weighting in the same or the traded asset we can find among others the following indices:
- ISEQ 20 Leveraged index. This represents the evolution of the ISEQ20, but with a leverage of 200%.
- ISEQ bond index. Represents the quotation of the sovereign debt of the Irish government classified based on their maturities.
- ISEQ Small Cap. This index lists the companies with the lowest market capitalization .
- ISEQ Overall. This index has a longer time history and is used to make comparisons on the development of the Irish stock market over longer periods of time.
- ISEQ 20 capped index. In this index we find a great diversification of companies, each weighing a maximum of 9% of the total.