Warsaw Stock Exchange: Changes To The Rules Of Companies’ Weightings In The WIG, WIG-PL, WIRR And Subsectoral Indices Portfolios

Starting from March 21, 2005, WSE introduces new rules to the methodology of companies’ weightings in the WIG, WIG-PL, WIRR and subsectoral indices. Instead of previous regulations based on the number of shares admitted to trading, new weightings will be determined by the number of free float shares.

Hitherto, index participants’ shares based on the number of shares admitted to trading and, in case of high ownership concentration, the packet was reduced by half or even fivefold.

New regulations base on the free float. According to the WSE definition, the free float shares are blocks of shares below 5%. The exception constitute shares held by investment and pension funds, asset managements and shares covered by ADR and GDR issues. Shares held by the State Treasury are always excluded from the free float.

In case of foreign companies listed on WSE, the free float shares constitute a median of shares deposited in the National Depository of Securities for the last three months.

Still, the weight of one company cannot exceed 10% and the weight of one sector cannot exceed 30%.

According to data from the beginning of February 2005, initial simulations, , indicate that in most cases companies’ weightings in WIG index remain unchanged. Maximum increases refer to PEKAO, AGORA, NETIA and KETY. On the other side, the weights of BACA, BANK BPH and GTC will decrease.

The new methodology was consulted with the wide group of capital market participants (investment and pension funds) and received the broad support.