INDEX OR INDICE

A statistical measure of change in an economy or a securities

market.

In the case of financial markets, an index is an imaginary

portfolio of securities representing a particular market or a
portion of it.

Each index has its own calculation methodology and is usually

expressed in terms of a change from a base value.

Thus, the percentage change is more important than the

actual numeric value.
MAJOR GLOBAL INDICES

 Asia/Pacific indices

 American indices

 European indices

 South africa/middle east indices

Nasdaq Composite
• The is a stock market index of • On March 10, 2000, the index
the common stocks and similar peaked at an intra-day high of
securities (e.g. ADRs, tracking 5,132.52, and closed at an all-
stocks, limited partnership time high of 5,048.62
interests) listed on the NASDAQ
stock market.
• It has over 3,000 components.
• An indicator of the performance
of stocks of technology
companies and growth
companies.
• Since both U.S. and non-U.S.
companies are listed on the
NASDAQ stock market, the
index is not exclusively a U.S.
index
• The is a stock market index of 100 of • This particular index, which consists of
the largest non-financial companies Industrial, Technology, Retail,
listed on the NASDAQ. Telecommunication, Biotechnology,
• It is a modified capitalization- Health Care, Transportation, Media and
weighted index. The companies' Service companies;
weights in the index are based on their • Abbreviated as NDX
market capitalizations, with certain • The all-time highs for the index, set at
rules capping the influence of the the height of the Dot-Com Bubble in
largest components. I 2000, stand above the 4,700 level
• it does not contain financial companies, • As of December 2010, the index trades
and includes companies incorporated around the 2,160 level
outside the United States
• The NASDAQ-100 began on January
31, 1985 by the NASDAQ, trying to
promote itself in the shadow of the
New York Stock Exchange.
 Capitalization-weighted index

is an index whose components are weighted

according to the total market value of their
outstanding shares.
Also called a market-value-weighted index.
 The impact of a component's price change is
proportional to the issue's overall market value,
which is the share price times the number of shares
outstanding
THE S&P 500
• is a free-float capitalization- • The highest point reached was
weighted index published 1,565.15 on October 9, 2007.
since 1957 of the prices of 500 • 1,206.07 on December 1, 2010,
large-cap common stocks
actively traded in the United
States.
• The stocks included in the
S&P 500 are those of large
publicly held companies that
trade on either of the two
largest American stock market
exchanges; the New York
Stock Exchange and the
NASDAQ.
Dow Jones Industrial Average
(DJIA)
• Also referred to as the Industrial • The average is price-weighted, and to
Average, the Dow Jones, the compensate for the effects of stock splits
Dow 30, or simply the Dow, is a and other adjustments, it is currently a
stock market index, and one of scaled average. The value of the Dow is
several indices created by Wall
Street Journal editor and Dow not the actual average of the prices of its
Jones & Company co-founder component stocks, but rather the sum of
Charles Dow the component prices divided by a
divisor, which changes whenever one of
• It is an index that shows how 30
the component stocks has a stock split or
large, publicly owned companies stock dividend, so as to generate a
based in the United States have consistent value for the index.
traded during a standard trading • On October 9, 2007, the Dow Jones
session in the stock market. It is Industrial Average closed at the record
the second oldest U.S. market level of 14,164.53
index after the Dow Jones
• February 1, 2011, the Dow settled at the
Transportation Average, which
was also created by Dow. 12,040.16 level
DOWJONES EURO STOXX 50
 Stated Objective
To provide a Blue-chip representation of supersector leaders in the European
union.It Covers Austria, Belgium, Finland, France, Germany,Greece, Ireland,
Italy, Luxembourg, the Netherlands, Portugal and Spain.

 Unique Aspects
 Captures approximately 60% of the free float market capitalisation of the
EURO STOXX Total Market Index (TMI), which in turn covers approximately
95% of the free float market capitalisation of the represented countries.
 Serves as the basis for single country indices for all 12 Eurozone countries. For
the time being the following indices are disseminated: EURO STOXX 50
Subindex France, EURO STOXX 50 Subindex Italy and EURO STOXX 50
Subindex Spain.
Categories Facts
Weighting Free float market capitalisation subject to 10% weighting
cap
Component Number 50
Review Frequency Annually, in September
Calculation/Distribution Price (EUR/USD),
Net Return and Gross Return (EUR): Every 15 seconds during local
trading hours
Net Return (USD): End-of-day
Base Value / Base Date 1,000 as of 31 December 1991 for Price and Net
Return
1,000 as of 31 December 2000 for Gross Return
History Price and Net Return: Available daily back to 31 December
1986
Gross Return: Available daily back to 31 December 2000
Date Introduced 26 February 1998
Settlement Procedure The settlement index value is calculated daily as
the average of the41 index values disseminated between 11:50:00
CET and 12:00:00 CET
 Supersector Weighting (%)
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||| 18.8 Banks
|||||||||||||||||||||||||||||||||||||||||| 9.7 Utilities
|||||||||||||||||||||||||||||||||||||||| 9.3 Oil & Gas
|||||||||||||||||||||||||||||||||||||| 8.9 Insurance
||||||||||||||||||||||||||||||||||||| 8.6 Telecommunications
||||||||||||||||||||||||||||||| 7.3 Chemicals
||||||||||||||||||||||||||||||| 7.2 Industrial Goods & Services
|||||||||||||||||||||||| 5.5 Food & Beverage
||||||||||||||||||| 4.3 Personal & Household Goods
|||||||||||||||||| 4.1 Technology
||||||||||||||||| 4.0 Automobiles & Parts
||||||||||||||| 3.4 Health Care
|||||||||||||| 3.1 Construction & Materials
||||||| 1.6 Basic Resources
||||||| 1.6 Media
|||||| 1.3 Retail
|||| 0.8 Real Estate
||| 0.7 Financial Services
Country Weighting (%)
|||||||||||||||||||||||||||
 OMX BALTIC 10 INDEX

 The index consists of a portfolio of the largest and most

traded shares, representing all sectors available on the
NASDAQ OMX Baltic Market. The index serves as an
indicator of the overall trend in the market and is intended
to offer a cost effective index that an investor can fully
replicate.
 The OMXBB is revised twice a year, on January 1 and July
1, to ensure that it offers high investability and low
transaction costs.
 The base date for OMX Baltic index is December 31, 1999,
with a base value of 100.
 S&P EUROPE 350
• The S&P Europe 350 is an equity index drawn from 17 major
European markets, covering approximately 70% of the
region’s market capitalization.  It is a unique index, designed
for the investor seeking broad market exposure in Europe
through an index that is efficient to replicate.

• It comprises of the S&P Euro, the S&P Euro Plus and the
S&P United Kingdom. Each stock is analyzed for size and
liquidity, and each component region has appropriate sector
and country representation. The size of each market
corresponds to its relative size in the index universe based on
float-adjusted market value
 Criteria for Index Additions
Market Capitalisation
Liquidity( Annual value traded)
Domicile(HQ of company, listing of stock)
Eligible Securities(All common & preferred stock of equity ,
does not include convertible stock ,bonds)

 Criteria for index removal

Companies that substantially violate one or more of the criteria for

index inclusion.
Companies involved in merger , acquisition such that they do not
meet inclusion criteria.
 Hang seng index (.HSI)
 The Hang Seng Index is a free float-adjusted market
capitalization-weighted stock market index in Hong
Kong.

 It is used to record and monitor daily changes of the

largest companies of the Hong Kong stock market and is
the main indicator of the overall market performance in
Hong Kong.

 These 45 constituent companies represent about 60% of

capitalization of the Hong Kong Stock Exchange.
 Hang Seng Stock Classification System
• Hang Seng Stock Classification System is a comprehensive system designed
for the Hong Kong stock market by Hang Seng Indexes Company Limited.

• It reflects the stock performance in different sectors.

General classification guidelines:

i) The sales revenue arising from each business area of a company is the
primary parameter of stock classification.

ii) A company will be classified into different sectors according to its

majority source of sales revenue(or profit or assets if relevant).

iii) Re-classification of a stock's Industry Sector will occur once the company's
business has undergone a major change, such as, substantial merger or
acquisition.
 Industry sectors:
• Energy
• Material
• Industrial Goods
• Consumer Goods
• Services
• Telecommunications
• Utilities
• Financials
• Properties & Construction
• Information Technology
• Conglomerates
CALCULATION FORMULA FOR HIS

The current Hang Seng Index is calculated from this formula:

Descriptions on parameters:

• P(t) ： Current Price at Day t

• P(t-1) ： Closing Price at Day (t-1)
• IS ： Issued Shares (Only H-share portion is taken into calculation in
case of H-share constituents.)
• FAF ： Freefloat-adjusted Factor, which is between 0 and 1, adjusted
quarterly
• CF ： Cap Factor, which is between 0 and 1, adjusted quarterly
KOSPI (^KS11)
• The Korea Composite Stock Price Index or KOSPI
is the index of all common stocks traded on the Stock
Market Division—previously, Korea Stock Exchange—of
the Korea Exchange.

• It's the representative stock market index of South

Korea, like the Dow Jones Industrial Average or S&P
500 in the U.S.

• It's calculated based on market capitalization.

• As of 2007, KOSPI's daily volume is hundreds of millions

of shares.
• As of October 2007, KOSPI has over 700
components.

• Top 10 stocks by market capitalization are:

Samsung Electronics
POSCO
Hyundai Heavy Industries
Kookmin Bank
Korea Electric Power
Shinhan Financial Group
SK Telecom
Woori Finance Holdings
LG Display
Hyundai Motor
 The SSE Composite Index is an index of all stocks (A shares
and B shares) that are traded at the Shanghai Stock Exchange.

 The index was launched on July 15, 1991.

 SSE Indices are all calculated using a Paasche weighted

composite price index formula. This means that the index is
based on a base period on a specific base day for its
calculation.

 The base day for SSE Composite Index is December 19, 1990,
and the base period is the total market capitalization of all
stocks of that day
 Current index = Current total market cap of
constituents × Base Value / Base Period

 Total market capitalization = ∑ (price × shares

issued)
 Nikkei index (^N225)
 The Nikkei 225 or the Nikkei index, is a stock market
index for the Tokyo Stock Exchange (TSE).

 It is a price-weighted average (the unit is yen), and the

components are reviewed once a year.

 Stocks are weighted on the Nikkei 225 by giving an equal

weighting based on a par value of 50 yen per share.

 The Nikkei 225 is designed to reflect the overall market,

so there is no specific weighting of industries.
 Bovespa index (^BVSP)
• The Bovespa Index is a total return index weighted by
traded volume and is comprised of the most liquid
stocks traded on the Sao Paulo Stock Exchange.

• The Bovespa Index is the main indicator of the

Brazilian stock market’s average performance.

• It is the current value, in Brazilian currency, of a

theoretical stock portfolio constituted in 02/01/1968
(base value: 100 points), by a hypothetical
investment.

• Objective
Ibovespa’s basic objective is to be an average
indicator of the market performance.
NEGOTIABILIY INDEX
• The IBovespa uses the Negotiability index to calculate the
criteria and weighting of the stocks on the index. The
Negotiability Index helps us understand the representation of
the stock in the cash market on the exchange, which allows us
to ascertain the participation of every component of the
IBovespa.

• This is similar to the Free float method used by various indices

using the market capitalization method for calculating the
index level.
Indices used in the Singapore
Stock Exchange
The following are the indices used in the Singapore Stock Exchange:
• Strait Times Index
• MSCI Singapore Free Index
• FTSE Group Indices
– FTSE SGX Asia Shariah 100
– FTSE ST Mid Cap
– FTSE ST Small Cap
– FTSE ST All-share
– FTSE ST Fledgling
– FTSE ST China
– FTSE ST China Top Index
– FTSE ST Real Estate
– FTSE ST Real Estate Holding and Development
– FTSE ST Real Estate Investment Trusts
– FTSE ST Oil & Gas
– FTSE ST Basic Materials
– FTSE ST Industrials
– FTSE ST Consumer Goods
– FTSE ST Health Care
– FTSE ST Consumer Services
– FTSE ST Telecommunications
– FTSE ST Utilities
– FTSE ST Financials
– FTSE ST Technology
STRAITS TIMES INDEX
• The Straits Times Index is the main equity index of
the stock market of the country and it is compiled by a
newspaper of the same name.
• The FTSE Straits Times Index (STI) is a
capitalization-weighted stock market index that is
regarded as the benchmark index for the Singapore
stock market.
• It tracks the performance of the top 30 companies
listed on the Singapore Exchange. It is jointly
calculated by Singapore Press Holdings (SPH),
Singapore Exchange (SGX) and FTSE Group (FTSE).
FEATURES
 The STI is the headline index of the FTSE ST Index Series, which
comprises a total of 77 indices
 The index has been designed for the creation of structured products,
index tracking funds and ETFs, or for use as a performance
benchmark
 Stocks are free-float weighted to ensure that only the investable
opportunity set is included within the indices
 Stocks are liquidity screened to ensure that the index is tradable
 Capital and total return indices are available within this series
 The STI is now distributed on an intra-second streaming basis,
providing investors with the fastest and most up to date read of the
Singapore market to respond more rapidly to market events
 The formula for calculation of the index is as
follows:

Index = Summation over (N stocks x Price x

Number of issued shares x Weight)/Divisor.
 MSCI Singapore Free Index
The MSCI Singapore Free Index is a free-float adjusted
market capitalization weighted index that is designed to
track the equity market performance of Singapore securities
listed on Singapore Stock Exchange.
The MSCI Singapore Free Total Return Index takes into
account both price performance and income from dividend
payments.
It is based on the MSCI Global Investable Market Indices
Methodology targeting a free-float market capitalization
coverage of 85%. The index has a base date of December 31,
1987 and uses "foreign" prices instead of local prices when
available.
SGX MSCI Asia APEX 50 Index Futures
SGX MSCI Hong Kong+ Index Futures
SGX MSCI Singapore (SiMSCI) Futures
SGX MSCI Singapore (SiMSCI) Options
SGX MSCI Taiwan Index Futures
SGX MSCI Taiwan Index Options
 FTSE Group Indices
The index is maintained by the FTSE Group, an
independent company which originated as a joint
venture between the Financial Times and the London
Stock Exchange.
It is calculated in real time and published every 15
seconds.
The basic formula for any index is (be it capitalization
weighted or any other stock index):
Index level= Σ(Price of stock* Number of shares)*Free
float factor/ Index Divisor.
The Free float Adjustment factor represents the
proportion of shares that are readily available for
trading as a percentage of all issued shares. The factor
is then rounded up to the nearest multiple of 5% for
calculation purposes. To find the free-float
capitalisation of a company, first find its market cap
(number of shares x share price) then multiply by its
free-float factor. Free-float capitalisation, therefore,
does not include restricted stocks, such as those held
by company insiders.