(News Bulletin 247) – The media and communications group was, somewhat to everyone’s surprise, chosen by the Euronext scientific council to return to the Parisian index. Which allows its action to progress this Friday.

Euronext’s scientific council took some observers, as well as investors, by surprise. Thursday evening, this body ruled on the composition of the CAC 40 by releasing Worldline, a decision widely expected in view of the stock market plunge of the payments group (-56.8% over the whole of 2023).

To replace Worldline, the board chose to reinstate Vivendi, six months after the media and communications company was ejected from the flagship index of the Paris Stock Exchange by Edenred.

Which was a bit of a surprise, as the scientific council is not in the habit of bringing back a group ejected from the CAC 40 a few quarters after its release (this, however, happens regularly on the second major index of the Paris Stock Exchange, the SBF 120). ).

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Lower capitalization than others

Furthermore, Vivendi did not have the best weapons to claim a return to the CAC 40. The group’s action is evolving close to balance over the whole of 2023, being light years ahead of the progression of the CAC 40. by 15% since the start of the year.

Its floating capitalization, one of the two purely quantitative criteria taken into account by the scientific council, along with trading volumes, was consequently lower than that of several other groups which knocked on the door of the Parisian stock market elite. .

“Eiffage (capitalization of 9.2 billion euros, 76% free float) and Sodexo (capitalization of 14.8 billion euros, 55% free float) are being overtaken by Vivendi (8.3 billion capitalization and 63% of float)”, notes Invest Securities this Friday morning.

We can also add to this list Accor (9 billion euros, 75% free float) which has had a magnificent stock market performance this year, with the stock gaining more than 45% since January 1st.

Euronext’s scientific council was able to judge that Vivendi represented a sector that was not very present on the CAC 40, namely the media, and ultimately not so far from tech, that of Worldline.

A (positively) surprised market

The fact remains that Vivendi is therefore returning to the CAC 40, where the group has always been present, with the exception, therefore, of the last six months. His return will be effective at the opening of the session on Monday, December 18.

This Friday, Vivendi shares rose 2.6% around 9:30 a.m. following the scientific committee’s announcement.

“The movement is simple: funds indexed to the CAC 40 (ETFs, Editor’s note) will have to buy back the stock to continue to replicate the performance of the index. And then, moreover, the surprise effect fully plays out on the market which did not anticipate this decision: it is curious that the company returned to the CAC 40 six months after leaving it,” explains an analyst.

In theory, entry into a benchmark index is positive for a stock, because the stock actually benefits from buyer flows linked to passive management. But in fact, groups that join the CAC 40 can then experience a difficult journey, because this entry can occur at a time when their stock market potential is exhausted or close to being exhausted. Worldline and Alstom, which joined the CAC 40 in 2020, have suffered since then. And as a recent example, Edenred has lost 13% since its inclusion in the index in mid-June.