Euro Stoxx 50: 1997-2006 Shareholder Value Creation in Europe

25 Pages Posted: 9 Mar 2007

See all articles by Pablo Fernandez

Pablo Fernandez

IESE Business School

Jose M. Carabias

London School of Economics & Political Science (LSE) - London School of Economics

Julio Aznarez

ESE Business School - Universidad de Los Andes

Óscar E. Carbonell López

Universidad Panamericana - Instituto Panamericano de Alta Dirección de Empresa (IPADE)

Date Written: March 6, 2007

Abstract

2006 was a good year for the shareholders of the companies in the Euro Stoxx 50. The shareholder value creation of these 50 companies was €246.1 billion. The companies that created more value for their shareholders were Santander (€16.2 billion), Endesa (€15.8 billion), Suez (€15.6 billion) and Telefonica (€14.8 billion). The companies that destroyed more value were: Sanofi Synthelabo (-€10.7 billion), Nokia (-€3.4 billion) and Telecom Italia (-€2.9 billion).

The most profitable company in 2006 was Endesa (75%).

The market value of the 50 companies included in the Euro Stoxx 50 was €2.44 trillion in 2006, although only €2.12 trillion were included in the index.

ENI was the top shareholder value creator and Deutsche Telekom the top shareholder value destroyer during the nine-year period 1997-2006.

A portfolio long in the companies that entered the index and short in the companies that abandoned the index had on average a 6.85% return in the 20 days prior to the index recomposition and a 0.97% return in the 20 days after the index recomposition.

Keywords: shareholder value creation, shareholder value added, shareholder return, required return to equity, Euro Stoxx 50

JEL Classification: G12, G31, M21

Suggested Citation

Fernandez, Pablo and Carabias, Jose M. and Aznarez, Julio and Carbonell López, Óscar E., Euro Stoxx 50: 1997-2006 Shareholder Value Creation in Europe (March 6, 2007). Available at SSRN: https://ssrn.com/abstract=968714 or http://dx.doi.org/10.2139/ssrn.968714

Pablo Fernandez (Contact Author)

IESE Business School ( email )

Avenida Pearson 21
Barcelona, 08034
Spain
+34 91 357 0809 (Phone)
+34 91 357 2913 (Fax)

HOME PAGE: http://web.iese.edu/PabloFernandez/

Jose M. Carabias

London School of Economics & Political Science (LSE) - London School of Economics ( email )

United Kingdom

Julio Aznarez

ESE Business School - Universidad de Los Andes ( email )

Av. Plaza 1905
Santiago
Chile
+56 22 618 1570 (Phone)

Óscar E. Carbonell López

Universidad Panamericana - Instituto Panamericano de Alta Dirección de Empresa (IPADE) ( email )

Floresta 20, Col. Clavería
Delegación Azcapotzalco 02080
Mexico
52 55 53 990083 (Phone)
52 55 53 99 7682 (Fax)

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