This group is now seen as a global player

We can be pessimistic about French and optimistic growth on the CAC 40. "It is the teaching that was Patrick Artus, Chief Economist at the Caisse des Dépôts et Consignations, a study published last February. Figures and graphics support, it demonstrated that the progression of the gross domestic product (GDP) is completely disconnected from that stock. This dissociation him seemed entirely justifiable, since companies that make up the CAC 40 index realize on average 69 of their turnover abroad, including 32 outside Europe. "It is therefore quite risky to base a geographical strategy of stock investment on a comparative analysis of national economic macro situations." "It's happy in the case of the CAC 40 companies, given the weakness of the anticipated growth," he wrote.

The last round of annual results confirms these observations. Not only the part of the turnover achieved in France by the CAC 40 companies is shrinking, but the part of Europe itself decreases, to the benefit of the United States and emerging countries.

This internationalization of the CAC 40 is however not quite uniform. Some sectors such as oil or pharmacy are long-standing, very exposed in global markets. Others keep on the contrary very French staining. This is the case especially of banks, which are confined in part within their borders by the constraints of network.

But the mass of the CAC 40 companies gradually defeat of his national clothes in search of new relays for growth abroad. Among the most egregious examples, management professionals think including LVMH. "This group is now seen as a global player." Shops are present in all capitals, clientele is very diverse and the group is implementing a sophisticated currency hedging policy. "Yet, twenty years ago, his flagship, Vuitton brand, still conveyed the image of the"Paris malletier", a mark which goods flowed mainly in France", traces Laurent Imbert, Director of the management shares European and emerging at CDC Ixis Asset Management. Since then, the contribution of foreign markets in the CAC 40 companies turnover has increased significantly. In 2003, groups such as Alcatel, Thomson, STMicroelectronics and l ' Oréal achieved half of sales outside nor the France, but of Europe...

"Consumer goods where technology are best able to benefit from this broad movement", note Tanguy Moreau, analyst in Federal management. "A group such as l ' Oréal may very well make its products in a country and then export it in another." In contrast, sectors such as telecoms are dependent on a national network of equipment and subscribers. Expansion outside the borders of a group such as France Telecom is thus structurally limited. That said, it is always possible to grow beyond their domestic market through acquisitions.

Managers as a whole however welcomed the fact that the CAC 40 is less HABs. For management professionals, it is indeed an excellent tool for global growth. As summarized Jean-Charles Mériaux, Manager and associate DNCA Finance, "a title as Lafarge allows exposure to emerging markets while limiting risk taking and preserving heritage, because the Group has always known structure the markets he conquers."

Effect of change

The reverse is obviously at the level of the effects of Exchange. In 2003, the companies have thus faced the decline of the dollar, which was heavily encumbered their results. "The problem is inextricably linked to this type of values." "Two years ago, the issue for companies in Latin America, such as Carrefour and Suez", said Cédric Roland-Gosselin, responsible for managing private at ING. "The impact is however." In the case of Aventis, the depreciation of the greenback cropped alone, 14 of the progression of the profits. In 2003, they had increased by 35 excluding effect of Exchange, to finally to 21 after the conversion. Also, currencies have significant weight in the judgment that the investors on the CAC 40 companies.

If the index stays a very popular tool for professional investors, in has not lost a bit of his "aura". As the CAC 40 companies are now put in competition with their European counterparts. "These past two years, the performance of Suez and Veolia were part of their sector." Now that savings shares (PEA) plans are open to Europe, investors therefore had every interest in favor of Spanish collective services companies, which are much better defended. "Nevertheless, the values of the CAC 40 should retain the favour of French investors, because it is easier to identify their qualities and their potential for appreciation", says Cédric Roland-Gosselin.

As noted by managers, the companies making up the index continue to offer undeniable advantages over medium capitalization. The first, from Laurent Imbert, is to present more guarantees on their development outside their borders. Index companies have the means to implement coverage of effective exchange suffering them finally less than average capitalization transitioning to the assault to foreign markets.

The second advantage is to be better able to do in the face of adversity. "The CAC 40 companies have a superior financial base, which allows them to better survive in times of crisis." When they restructure themselves, they must certainly go provisions. But they nevertheless have a larger than average capitalization margin of manoeuvre to reduce their costs, transfer of assets, close losses homes. Similarly, it is easier to conquer of foreign market. "They can wait longer before their business takes off, or even wipe failures and doing back machine, without the life of the company in danger," argued Tanguy Moreau.

CAC 40 companies also have an advantage over their European counterparts. "With the FTSE, the London index, the CAC 40 is an excellent summary of Europe, concluded Jean-Charles Mériaux." It is present on all sectors of activity, with the exception of the contents first (excluding oil). An investor may therefore constitute a very beautiful portfolio with even a very large place with French values.