KBX is introduced in continuation of the NOREX co-operation and the adoption of GICS at the exchanges in Copenhagen, Stockholm and Oslo.
KBX is a benchmark index, i.e. it has been designed in such a way that it reflects the wide range of shares listed on the Copenhagen Stock Exchange. Consequently, by comparing the performance of a given share portfolio with the development of the KBX, you can find out whether it has performed better or poorer than the CSE market as a whole. The KBX portfolio has been designed with a view to covering approx. 80 per cent of the free float adjusted market capitalisation in each industry group (GICS level 2), in order that the portfolio may reflect the market development of all the companies listed on the Exchange.
"The introduction of KBX serves two purposes. First, the KBX will be the best indicator of the overall performance of the Danish equity market with a much better reaction time in connection with price-sensitive corporate actions than the KAX All-Share Index. Secondly, the KBX is expected to take over the role as the benchmark index from the KFX Index and thus encourage the investors to focus more on the many interesting shares that the Danish equity market has to offer in addition to the well-known blue-chip shares of the KFX Index," says President and CEO Hans-Ole Jochumsen.
KBX comprises 50-80 companies and is revised biannually according to a number of criteria.
As has been the case with several other benchmark indices, the Exchange will later introduce a "capped" version of KBX. This means that a cap operates to limit the individual company to a maximum weighting in the index. The upper limit will be 10 per cent and reflect the requirements for the unit trusts' risk diversification specified in the UCIT Directive. The "capped" version will be called KBX cap.
The specific rules regulating GICS, KBX selection, review, free float calculation, etc are available at the Exchange's web site www.xcse.dk, click on GICS, and the preliminary KBX portfolio is also available here.
