FT30 Index , also known as FT Ordinary Share Index, measures the stock trading index of 30 leading UK companies. The 30 component stocks are selected in such a way so as to reflect the British Industry. FT30 is the UK share index that was launched in 1935. FT30 index is now rarely used especially after FTSE 100 replaced it.
The 30 British companies that are enlisted in the FT30 index are selected from the various industries of the economy. This makes the index more representative of the total UK share market. FT30 index is the oldest continuous index in the United Kingdom and also happens to be one of the oldest in the world.
The 30 companies that are listed in the FT30 Index are – BG, Land Securities, BP, Lloyds TSB, BAE Systems, LogicaCMG, British Airways, Man Group, British American Tobacco, Marks & Spencer, BT, National Grid, Cadbury Schweppes, Prudential, Compass, Reuters, Diageo, sRoyal & Sun Alliance, GKN, Royal Bank of Scotland, GlaxoSmithKline, Tate & Lyle, ICI, Tesco, Invensys, Vodafone, ITV, Wolseley, Ladbrokes and WPP.
The FT30 index was designed in order to capture the changing mood of the equity market in the UK. This is reflected by the trading of the most leading shares in the market.
The FT30 index was started by Financial News and used to be the most important representative of the stock market in London. But with the launch of FT Actuaries series in 1962 and FTSE 100 in 1984, the importance of FT30 diminished rapidly. The calculation method of the FT30 index is different from that of the FTSE indices. In FT30, an equal weight is given to the 30 constituents in contrast to the weights based on market capitalization used in the FTSE indices. In case of FT30, the constituents change only when the company goes through merger or failure.
The FT30 index is calculated by the adjustment based method. Here the price movements from the previous day’s closing index considered to generate the following formula:
T_Ind = Y_Ind x 300( tod_1/yes_1 x tod_2/yes_2 x ……. x tod_30/yes_30 )
where: T_Ind = Index of Today
Y_Ind = Index of Yesterday
tod_1, tod_2..tod_30 = Current share price of the 30 constituents
yes_1, yes_2..yes_30 = Yesterday’s closing price of the constituents
Last Updated on: 23rd June 2015