What is FTSE?
FT stands for Financial Times and SE stands for London Stock Exchange. The FTSE is not apart of the stock exchange despite its name. There is FTSE 100, FTSE 250, FTSE 350, FTSE SmallCap, and FTSE All-Share. It is an index that shows the financial performance of the companies on the index. FTSE 100 has 100 of the largest companies on the index, the FTSE 250 has 250 companies that are considered to be the next largest after the first 100 (FTSE 100). FTSE 350 is made up of the FTSE 100 + FTSE 250. FTSE SmallCap are for small companies and the FTSE All-Share is the companies from FTSE 350 + FTSE SmallCap combined.
How is it Calculated?
The total market value of a company’s outstanding shares and the index value are used to compute the number you see quoted. ‘Up or down’ refer to how the calculations of the index have either gone up or down in comparison to the day before. The number is updated every 15 seconds when the market is open. However, the FTSE 250 is a better indicator of the UK’s economy because it is more representative of the types of businesses in the market in comparison to the top 100 and the FTSE 100 is also more heavily affected by exchange rates.
How does a company get on the FTSE?
Currently Barclays and EasyJet are on the FTSE 100. This means that people are buying their shares which is causing the companies to do well and move up the index. If people were to stop buying their shares, then their company would drop in value and possibly be removed from the FTSE 100 if the company dropped too low on the index. The companies on the FTSE 100 are changed quarterly to ensure the index is reflective of the top 100 companies.
Why should you know about the FTSE as a future Lawyer?
The companies on the FTSE will seek legal advice.
BREXIT is causing companies on the FTSE to worry about their place on the FTSE 100 because people will be less likely to buy shares from their company if BREXIT has negatively impacted their company in some way to make it less favourable.
FTSE has to do with client’s investments, so those clients may seek legal advice.
FTSE would be referred to in mergers and acquisitions.