Curtain falls on fledgling dotcom index
3 December 2007, MADRID - Just seven years after its creation, the Spanish index Ibex Nuevo Mercado, listed as a grouping of Spain's technological companies with great growth potential, has shut down, after losing almost 70 percent of its initial value.
3 December 2007
MADRID - Just seven years after its creation, the Spanish index Ibex Nuevo Mercado, listed as a grouping of Spain's technological companies with great growth potential, has shut down, after losing almost 70 percent of its initial value.
The index, which had struggled since its inception in April 2000, lost 1,200 of its 10,000 opening points in just a week, 30 percent of its initial value in its first two months of trading, and hit rock-bottom in August 2002, when it was down 80 percent from where it opened.
The reasons for the failure of the index have been described by some industry experts as a case of too little too late. "It was born with a death sentence, in the middle of the tech bubble burst," explained Jordi Falgueras, from Gaesco.
Others claim that the index never really corresponded to the technological sector it was formed to represent. "These so-called 'new economy' companies in Spain hardly even exist. In the Nuevo Mercado there was a pharmaceutical company, a telecom, another renewable energy company - none of which correspond to this the high potential technology," said David Navarro, from Inversis. "In Spain, there is no Yahoo, no Google. There were no companies to keep the Nuevo Mercado afloat," he added.
And the trend is not specific to Spain, but rather, has plagued other recently closed Nasdaq-style indexes in Europe, such as German's Neuer Markt and Switzerland's SWX New Market.
Now, the eight Nuevo Mercado companies are waiting to be integrated into Spain's continuous market.
[Copyright EL PAÍS, SL./ C. PÉREZ / K. RAMUNDO 2007]
Subject: Spanish news