Nasdaq (NASDAQ:NDAQ) announces today a change in index methodology of the OMX Helsinki All-Share Cap Index, (Nasdaq Helsinki: OMXHCAP), which will become effective with the market open on Tuesday, December 1, 2020. Currently, OMX Helsinki All-Share Cap Index has a daily limit of 10% as the maximum weight of an index constituent company. Effective December 1, the maximum weight will be 7% per company on a quarterly basis.
The reconstruction of the OMX Helsinki All-Share Cap Index will be implemented to better enable using the Index as a benchmark according to the relevant UCITS rules and to bring its methodology further in line with OMX Stockholm Cap and OMX Copenhagen Cap. The Index will be capped according to UCITS rules down to 7% on a quarterly basis in December, March, June, and September. In each quarterly rebalance, any index company with a weight above 7% will be capped down to 7%. Additionally, the combined weight for all companies with a weight between 4.5% and 7% will be limited to 36%. In the period between each quarterly capping rebalance, the individual index company weights are allowed to float up to a maximum of 10% and to a maximum of 40% for the aggregate weight of index companies above 5%. If the thresholds are breached, an intra quarterly capping is triggered.
“The change in index methodology derives from our customer feedback,” says Henrik Husman, President of Nasdaq Helsinki, and Vice President, Head of European Cash Equities, Nasdaq. “Lowering the capitalization limit to 7% and changing the daily index adjustment method will make it easier for many fund managers to use the Index as a benchmark for their investment strategies.”
The OMX Helsinki All-Share Index (OMXH) includes all the shares listed on Nasdaq Helsinki. The aim of the Index is to reflect the current status and changes in the market. The OMX Helsinki All-Share Cap Index (OMXHCAP) is a weight limited version of the OMX Helsinki All-Share Index where the maximum weight of one company is limited to 7% of total market value of the Index effective December 1, 2020. OMXH and OMXHCAP indexes are available both as a price index, PI (OMXHPI and OMXHCAPPI, respectively) and a growth index, GI (OMXHGI and OMXHCAPGI, respectively). The base date for the OMX Helsinki All-Share Index and OMX Helsinki All-Share Cap Index is December 28, 1990, with a base value of 1,000.