A new European IT Index covering 400 IT stocks trading on all of Europe’s recognized stock exchanges could be used as the basis for new financial instruments, according to Regent Asssociates, the mergers & acquisitions advisor. The index, developed at the company’s Paris offices, will shortly be available via Bloomberg terminals, and accessible on the company’s web site, says Regent Associates partner Denis Campbell. He is also talking to internet web portal operator Yahoo! about hosting the index. The index had a market value of approximately 134 billion Euros at the end of January. By market value, 67% is made up of services companies, 24% of software product companies, 6% distributors and just 3% hardware companies. By numbers, 26% of the companies are British, 16% French and 13% German. The index, which uses prices at January 1 1997 as its base, is updated each day after European markets close. Regent, which developed the index primarily as a profile raising exercise, says it wants to license it to financial institutions which will then be able to use it as the basis for derivative instruments. However, Campbell admits that he has no idea yet how a license fee might be calculated. A bank, he noted, would most likely seek to take some control of how the index was put together because of the amount of money that is involved in derivative trading.
