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All Shares 22,091.82
Change  18.43
BRIndex30 16,209.39
Change  28.88
 
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 Rules & Regulations for BRIndex30 (Based on Average Turnover & no Un-traded day in last six months)
Scrip Selection Criteria BRIndex30 Calculation Adjustments in the Index Base Divisor Calculation
Recomposition of the Index Rules for newly listed companies (BRIndex30) BR Sectoral Index Rules for Newly Listed Companies (BR Sectoral)
Scrip Selection Criteria : Top

 


•  Turnover of the Scrip:
BRIndex30 is a turnover based index and the average turnover of the scrip in the last six months is the primary criteria for scrip selection. First 30 scrips having the largest average turnover for the last six months will be considered for the inclusion in the BRIndex30. (Companies fulfilling all the screening criteria only)

•  Trading Frequency:
It is necessary for a scrip to be traded on each and every trading day of the last 1 year; besides fulfilling the above criteria, to get included in the BRIndex30. (Exceptions can be made for extreme reasons, and the review committee would finally decide it).

 

 

BRIndex30 Calculation : Top


BRIndex30 is calculated using a “Market Capitalization Weighted” methodology. As per this methodology the level of index at any point of time reflects the total market value of 30 component stocks relative to a base period. The formula for calculating BRIndex30 is

 

BRIndex30 =
Market Capitalization X 5000
 
 
Base Divisor
 

 


Market Capitalization:
It is the sum of market capitalization of the BRIndex30 companies.


Base Divisor:
Base divisor is the base year market capitalization of BRIndex30 companies. It needs to be adjusted when there is any exclusion and inclusion of scrip in the selected BRIndex30 scrips or if there is any Right issue, mergers or newly issued Capital carried out in the BRIndex30 selected scrips.

An example of how the BRIndex30 is calculated can be demonstrated by using a three-stock sample. Table 1 illustrates the process. First, a starting point is selected and the initial value of the three-stock index set equal to 5000.


Day 1: Base Period Day (Table 1) *Note: All figures are taken hypothetically .

Stock

Share Price (in Pak Rs.)

Number of Shares

Market Value

A

10.00

50,000,000

500,000,000.00

B

10.00

30,000,000

300,000,000.00

C

10.00

20,000,000

200,000,000.00

Total Market Capitalization 1,000,000,000.00


BRIndex30 = 1,000,000,000.00 X 5000 = 5000

1,000,000,000.00 


 

Day 2: Index Value as on Day 2 (TABLE 2)

Stock

Share Price (in Pak Rs.)

Number of Shares

Market Value

A

11.00

50,000,000

550,000,000.00

B

11.00

30,000,000

330,000,000.00

C

11.00

20,000,000

220,000,000.00

Total Market Capitalization 1,100,000,000.00


BRIndex30 = 1,100,000,000.00 X 5000 = 5500

1,000,000,000.00  

 

 

Adjustments in the Index : Top

 

 

Adjustment in the index is required if there is any change taking place in the capitalization of the selected scrip. Such changes take place when there is any Right or fresh issuance of stock, mergers or buying back of shares carried out by the companies included in BRIndex30.

 

Cash Dividend:

At the issuance of cash dividend the company's next day opening price is reduced by the amount of dividend it announced i.e. XD Price. Therefore we need to adjust the the base divisor of the index for the next day.

 

Bonus Issue:

When there is any issuance of bonus shares, the market capitalization of the company does not undergo any change. Therefore we don't need to change the Base market capitalization (base divisor).

 

Right Issue:

When there is a right issuance by the company, included in the BRIndex30, the market capitalization of that company increase, by the number of shares issued based on the ex-right price. In such situation proportionate adjustment is made in the Base Market Capitalization to offset the effect of change in the new market capitalization in the index.

 

New Issue:

When the BRIndex30 listed company issue new shares its market capitalization increases. In this situation we also need to adjust the Base Market Capitalization for the index calculation.

 

Other Issues:

When there is any conversion of debentures to the shares, spin-offs, mergers, corporate restructuring or buy back of shares takes place by the company included in BRIndex30, we need to adjust the Base divisor as all of these conditions have an impact on the market capitalization.

 

 

Base Divisor Calculation : Top

 

Whenever a change occurs in the paid-up capital of the BRIndex30 scrip, the base divisor needs to be adjusted. The formula for calculating new base divisor is as follows:

 

New Base Divisor = Old Base Divisor X (New Market Cap. / Old Market Cap.)

In Table 2 the BRIndex30 is calculated for day 2. However, it is assumed that stock C number of shares will increase by 5,000,000 shares, effective at the opening of trading on day 3. Therefore, the divisor adjustment is made, as shown, after the close of trading on day 2., stock C's price, shares, and resulting market value are also as of the close of trading on day2.

Day 2. (After fresh issuance) Increase in stock C number of shares by 5,000,000 shares, after the close of trading on Day 2. (TABLE 3)

 

Stock

Share Price (in Pak Rs.)

Number of Shares

Market Value

A

11.00

50,000,000

550,000,000.00

B

11.00

30,000,000

330,000,000.00

C

11.00

25,000,000

275,000,000.00

Total Market Capitalization 1,155,000,000.00

 

BRIndex30 as on Day 2 = 5500

BRIndex30 Market Capitalization of (A, B & C) on Day 2 = 1,100,000,000.00

Divisor as on Day 2 = 1,000,000,000.00

New Market Capitalization (After fresh issuance) = 1,155,000,000.00

 

If we calculate the index at the beginning of day 3 without making any adjustment in the base divisor, after change in stock C shares. The index will be reported as

 

BRIndex30 (without base divisor adjustment) =
1,155,000,000 X 5000
  1,000,000,000
   
=
5775

                                           

 

As the above calculation shows that the index value at the beginning of day 3 is not the same as the index value of day 2 closing. Therefore we must adjust the base divisor so the index value remains the same, because the market capitalization change of the stock C is not attributed to the change in the stock C price's but it changes due to the change in number of shares of stock C. The calculation of new base divisor is

 

New Base Divisor =
1,000,000,000 X (1,155,000,000 / 1,100,000,000)
=
1,050,000,000

 

 

 

By adding stock C new issuance of shares, the new base divisor increases substantially as the aggregate market value increases proportionately, while the index remains unchanged. Thus, the impact on the price index of stock C isn't felt until day 3's trading begins and the index values remain the same during this non-trading interval, after the change in stock C number of shares. The application of new base divisor for index calculation at the beginning of the day 3 trading to verify that there isn't any jump gap in the index is as follows

 

BRIndex30 (beginning of day 3) =
1,155,000,000 X 5000
  1,050,000,000
   
=
5500

 

 

Day 3. Index calculation on day 3 after the adjustment in base divisor.

Stock

Share Price (in Pak Rs.)

Number of Shares

Market Value

A

12.00

50,000,000

600,000,000.00

B

11.75

30,000,000

352,500,000.00

C

12.50

25,000,000

312,500,000.00

Total Market Capitalization 1,265,000,000.00

 

=  1,265,000,000.00 X 5000 = 6023.81
      1,050,000,000.00  

 

 

Recomposition of the Index : Top

 

 

The re-composition of the index is based on the criteria we have set to include the company in the BRIndex30.

 

Turnover Base Rule:

If a company is not included in the BRIndex30, and its average turnover increases by the last company of BRIndex30 companies for the whole of re-composition period i.e. six months and it satisfies the other screening criteria, the company qualifies to be included in the BRIndex30.

 

Trading Rule:

It is necessary for a scrip to be traded on each and every trading day for the last 1 year; besides fulfilling the above two criteria, to get included in the BRIndex30. Exceptions can be made for extreme reasons, and the review committee would make a final decision.

 

 

Rules for newly listed companies (BRIndex30) : Top

 

 

Time Base Rule:

The newly listed company becomes eligible to be reviewed to enter in the BRIndex30 after a period of three month.

 

 

Turnover Base Rule:

A newly listed company will only be considered for inclusion in the BRIndex30, if its average turnover of last three month is greater than the 21st company's average turnover of BRIndex30, and it also satisfies the other screening criteria (in this case the period for screening will be three months). And if it doesn't, it will be reviewed again after its completion of six months. After six months, however, its average turnover needs to be merely higher than the 30 th company already included in BRIndex30.

 

Trading Frequency:

The trading frequency rule would not be applied for a newly listed company as it becomes eligible to be reviewed for listing in BRIndex30 after three months. But it is necessary for a company to trade on each and every trading day for after its enlistment.

 


BR Sectoral Indices : Top

 

 

BR Sectoral Indices are specially designed to show the movement of Five most active KSE Sectors namely, Cement, Commercial Banks, Power Generation & Distribution, Oil & Gas and Technology & Communication.

 

Each BR Sectoral Index includes all companies of its specific Sector except BR Oil & Gas Index. This Index covers companies included in both Oil & Gas Marketing and Oil & Gas Exploration Sectors.

 

The Calculation of Indices and adjustment of Base Divisor is the same as that of Brindex30 with single exception. BRIndex30 has a multiplier of 5,000 whereas each of the BR Sectoral Indices has a multiplier of 1000.

 


Rules for newly listed companies (BR-Sectoral) : Top


As new companies enter these selected KSE Sectors, they are included in their respective Indices.

 

 

 


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