Forty days after its IPO in the spring of 2001, Inditex was on the main Spanish stock index, the Ibex 35. A decade later, the textile company is closer than ever to becoming one of the 50 companies that comprise Europe's principal stock index, EuroStoxx. Although EuroStoxx will publish its newest list tomorrow, the latest provisional list put Inditex next to Volkswagen as a possible substitute for Alstom and Crédit Agricole.
The annual review will be carried out with tomorrow's data, but Stoxx typically publishes provisional lists that include all their candidates. The latest list from August 23 put Inditex at position 45. This spot does not guarantee that they will end up on the index, considering that in the first screening only 40 companies with the best capitalization appeared on the list, adjusted by the "free-float" capital that they have in the markets. Volkswagen would definitely be among the top 40.
So why is Inditex a solid candidate now? Because stocks 41-50 in the index are chosen among companies who hold positions between 41 and 60. Current members get preferential treatment, and while past predictions show that those ten spots will be occupied by companies already on the index, the latest ranking suggests that at least two stocks could drop off. This would leave room for Inditex.
The textile company could become the sixth Spanish company on the EuroStoxx index and the first Spanish stock to appear since Iberdrola did in 2003. Inditex has shown its strength during difficult times, and in the last few months it achieved significant advances. Further, since May it has climbed two spots in the ranking that rates total worth of European stocks. Its shares have risen 7% in six months, showing the second highest growth rate in the Ibex 35.
