According to officials from both organizations, the new index will have a sectoral balance that better reflects the Italian market. Each of the index constituents will be weighted using an equity-free-float adjustment that reflects its overall importance in Italy's equity market. It is also likely that the S&P/MIB 45 will in due course form the basis of new traded index contracts on Borsa Italiana.
"Standard & Poor's is the world's leading provider of investable equity indices. The methodological improvements and new inclusion criteria of the S&P/MIB 45 allow us to more accurately reflect the Italian equities market," said Massimo Capuano, CEO Borsa Italiana. "This is a great step forward for Italian equities. Standard & Poor's global reach will enhance our position throughout the world. We welcome our new partners and look forward to many additional collaborations."
"Borsa Italiana is Standard & Poor's first alliance with a leading equity exchange in Europe. It complements our index alliances with exchanges in Canada, Australia, Japan and the United States. This is part of our strategy of offering all investors consistent local and global investable indices," said Robert Shakotko, Managing Director, Standard & Poor's Index Services. "The S&P/MIB 45 is an investable benchmark for Italian equities in the spirit of the well-known S&P 500, and is based on a careful balance between liquidity and accurate market representation."
Standard & Poor's is expected to become Borsa Italiana's primary index provider for all equity indices in Italy over the coming months. In the last year, Standard & Poor's has made several significant moves into the European index marketplace beginning with the creation of the S&P Europe 350 and S&P Europe 350 Sector Indices, indices comparable to the U.S. S&P 500. The company recently introduced one of its best-known brands, the SPDR (Standard & Poor's Depositary Receipt) through a license agreement with Credit Lyonnais Asset Management. SPDR Europe, comprising SPDR Europe 350 and SPDR Euro, trades on the EuroNext exchange in Paris and belongs to the world's largest family of exchange traded funds that together capture 35% or $30 billion in global market share.
The S&P/MIB 45 will be free-float adjusted and have the Global Industry Classification Standard (GICS) applied to each constituent. The GICS classifications are expected to be applied throughout the entire Italian equities market. GICS - developed by Standard & Poor's and Morgan Stanley Capital International (MSCI) - was created in response to the global financial community's need for a single and consistent set of industry definitions. GICS has rapidly gained acceptance worldwide and its use in the S&P/MIB 45 will allow investors to compare accurately the performance of Italian indices with those around the world.
