SET Senior Vice President- Research & Information, Dr. Sethaput Suthiwart- Narueput, announced that the names of listed companies to be included in calculating the SET100 Index will be announced on April 18, 2005. The SET100 Index will start with a base of 1,000 and will be publicized from May 3, 2005 onwards. The securities prices of April 30, 2005 will be used to calculate the base index.
When the SET100 Index becomes effective, the SET50 Index will be adjusted to become more in line with it and to serve the derivatives market as well. The base information for the SET50 Index will remain the securities prices of August 16, 1995, but the base index will be changed from 100 to 1,000.
“The SET will adjust all the SET50 Index figures, starting from the base date, to become 3-digit figures instead of the current two, whilst still having 2 decimal points. For example, the previous SET50 at 46.87 points will become 468.68 points. The change will not pose any negative effects to the mutual funds’ portfolios as percentage changes in the index will remain unchanged,” Dr. Sethaput said.
The list of companies to be announced on April 18, 2005 will be for the calculation of SET100 only. The list will be effective until the end of June 2005. As for the SET50 list, the existing list will remain effective and used until end of June 2005 as well. After that, the SET will adjust the lists again.
He went on to say that: “The SET will adjust the list of securities for the SET100 and SET50 calculations every 6 months—that is to say, in January and July every year. From the 100 short-listed securities, the first 50 securities will be used for the SET50 calculation, while the entire 100 will be used for the SET100. A replacement set of names will also be available in case a stock in either the SET100 or the SET50 index is delisted. Before the new names of securities become effective, the SET will announce the list 10 business days in advance.”
Both of these indices will be useful performance benchmarks for the mutual funds’ portfolio management. Meanwhile the listed companies can apply these benchmarks to their investor relations work, as well as using them to compare themselves with other companies in the industry.
“The SET100 Index will encourage more investment in smaller companies, hence reducing the concentration of investment in the large-scale SET50 stocks whilst increasing liquidity for smaller firms,” Dr. Sethaput noted.
“If we base our calculations on information available at end-2004, companies to be included in the SET100 Index calculation will account for 80% of the total market capitalization and represent 86% of total turnover in the market.
“Overseas exchanges generally provide price indices for different sizes of securities. Many markets have more than one index, so as to clearly differentiate their product groups and provide benchmarks for price movements suited to each of investor group’s preferences,” the SVP concluded.
