What Is PSI 20 In Stock Market

The PSI 20 is the main stock market index that operates on the Lisbon Stock Exchange formed by the largest companies capitalized in that market.

In other words, the PSI 20 or Portuguese Stock Index is the stock market reference index of the Portuguese stock exchange and in which the companies with the most liquidity in this European country are grouped .

This index was created in 1992 with a base of 3,000 points and a dual purpose. First, to serve as the main trading and monitoring market for the Portuguese shareholder market. It also seeks to support and improve the options and futures market in the Portuguese economy and finance. It is the equivalent of the Spanish Ibex 35, the British FTSE 100, the French CAC 40 or the Italian FTSE Mib

This index is made up mainly of energy, distribution and media companies, as well as banks and insurance. The latter have reduced their risk exposure considerably due to the financial problem and debt crisis in Portugal.

The main characteristics of this stock index are:

  • PSI 20 is made up of company titles that have been admitted to operate in the markets regulated by Euronext Lisbon.
  • The component companies of the PSI 20 are made based on their capitalization or their turnover or sales volume.
  • The weighting of the inserted values ​​in PSI 20 is made on the basis of the free float or floating capital , the limit being 15% of the capitalization on the date of the revision.

The Creation of Euronext Lisbon

The Euronext Lisbon is the result of the merger of the Lisbon and Porto stock exchanges at the beginning of the 21st century, and its inclusion in the pan-European stock exchange that includes the Paris, Amsterdam, Brussels and later the London stock exchanges.

In this way, one of the main international stock markets was created, this action being one of the driving forces behind the opening and dynamism of the Portuguese stock market in the world

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