Glossary: FTSE All-Share Index
Originally known as the FTSE Actuaries All Share Index, the FTSE All-Share Index is a stock market index that aims to capture 98% of the full value of the London Stock Exchange. This means it’s a more accurate reflection of the overall UK stock market. The FTSE All-Share is the aggregation of the FTSE 100, FTSE 250 and FTSE Small Cap Indices. (Below the FTSE 100 is the FTSE 250 comprising mid-capitalised companies not covered by the FTSE 100, and representing approximately 15% of UK market capitalisation. Added together, they make the FTSE 350. Next comes the FTSE SmallCap, which consists of companies outside of the FTSE 350 Index and represents approximately 2% of UK market capitalisation.)
The term is interchangeable with stock exchange, and is a market that deals in securities where market forces determine the price of securities traded. Stockmarket can refer to a specific exchange in a specific country (such as the London Stock Exchange) or the combined global stockmarkets as a single entity. The first stockmarket was established in Amsterdam in 1602 and the first British stock exchange was founded in 1698.
A way of valuing a company by the total value of its issued shares and calculated by multiplying the number of shares in issues by the market price. This means the market capitalisation fluctuates continually as the value of the shares change in the market. For example, HSBC has 17.82bn shares in issue at a price of 646.2p making a market capitalisation of £115.15bn.
A market-weighted index of the 100 biggest companies by market capitalisation listed on the London Stock Exchange. It is often referred to as “The Footsie”. The index began on 3 January 1984 with a base level of 1000; the highest value reached to date is 6950.6, on 30 December 1999. The index is “weighted” by how the movements of each of the 100 constituents affect the index, so larger companies make more of a difference to the index than smaller ones. To ensure it is a true and accurate representation of the most highly capitalised companies in the UK, just like football’s Premier League, every three months the FTSE 100 “relegates” the bottom three companies in the 100 whose market capitalisation has fallen and “promotes” to the index the three companies whose market capitalisation has grown sufficiently to warrant inclusion. Around 80% of the companies listed on the London Stock Exchange are included in the FTSE 100.