Shareholder value creation in Europe. Eurostoxx 50: 1997-2003
Abstract2003 was a good year for the shareholders of the companies in the Euro Stoxx 50: the shareholder value creation of these 50 companies was €150,016 million. The companies that created most value for their shareholder were Siemens (€18,778 million), Telefonica (15,382) and BSCH (12,443). The companies that destroyed most shareholder value were Nokia (-€12,051 million), L'Oreal (-8,089) and Ahold (-5,427). None of the Spanish companies in the Euro Stoxx 50 destroyed shareholder value in 2003. Shareholder value destruction in the three-year period 2001-2003 was €-1.75 trillion. The market value of the 50 companies was €1.65 trillion in 2003, and €1.4 trillion in 2002. We also calculate the created shareholder value of the 50 companies during the seven-year period 1997-2003. Siemens was the top shareholder value creator and Nokia the top shareholder value destroyer during the seven-year period. A portfolio long in the companies that entered the index and short in the companies that abandoned the index had on average a 6% return in the 20 days prior to the index recomposition and a 7% return in the 20 days after the index recomposition. In 2003, the Euro Stoxx 50 was much more volatile than the S&P 500 or the Dow Jones.
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Bibliographic InfoPaper provided by IESE Business School in its series IESE Research Papers with number D/547.
Length: 26 pages
Date of creation: 12 Mar 2004
Date of revision:
shareholder value creation; created shareholder value; shareholder value added; shareholder return; required return equity;
Find related papers by JEL classification:
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
- M21 - Business Administration and Business Economics; Marketing; Accounting - - Business Economics - - - Business Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-04-04 (All new papers)
- NEP-CFN-2004-04-04 (Corporate Finance)
- NEP-FMK-2004-04-04 (Financial Markets)
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