The Oslo Exchanges Small Cap Index will also come into production on 23 May. This is an index of the 10% of companies with the lowest market capitalisation. The final index in the new index family, the Oslo Exchanges Mutual Fond Index, which is specifically adapted to meet the composition requirements of mutual securities funds, will come into production on Friday 8 June.
The old All Share Index has seen many rallies and falls in the 18 or so years it has been used as the reference measure for developments in the Norwegian stock market. Over the course of this period the old index has risen by more than 1,300%, and it has therefore certainly played its role in reflecting the accelerating growth of the Norwegian stock market. The old All Share Index is now to be replaced by the Oslo Exchanges Benchmark Index (OSEBX), which will be known as the 'Oslo Børs Hovedindeks' in Norwegian. The new index is based on an international standard developed by Morgan Stanley Capital International Inc and Standard & Poor's. The Stockholm Exchange and the Copenhagen Stock Exchange, as members of the NOREX alliance, already use the same standard.
International comparability
The new indices are based on a standard classification, independent of national boundaries, that is already used by a number of international exchanges. In terms of the Nordic market, the exchanges that make up the NOREX alliance will now use the same index family. The use of a common sectoral structure and industrial classification for companies is virtually essential to assist both Nordic investors and, in particular, international investors, in comparing investment alternatives. Oslo Exchanges expects the new indices to have positive effects for investors, and also believes that they will play an important role when the companies listed on Oslo Exchanges gain access to the significantly broader investor public that the NOREX marketplace will offer when it comes into operation before the end of the first quarter of 2002.
"The new sectoral structure and industrial classification offers greater opportunities for fair pricing of the companies listed on the Oslo market by making it possible for investors to compare them directly with companies listed on other marketplaces. The new index family also represents harmonisation with international trends and makes NOREX a more attractive, modern and competitive marketplace" comments Sven Arild Andersen, President of Oslo Exchanges.
The name of the Oslo Exchanges Benchmark Index has been chosen because the index gives an accurate picture of the overall performance of the Oslo Exchange even though the index only includes 68 of a total of 212 listed companies. The Oslo Exchanges Benchmark Index in effect only takes into account shares issued by its constituent companies that are freely available in the market, and it excludes state ownership, controlling interests (greater than 33%), shares held by primary insiders and cross holdings. The new index gives just as good a picture of the overall performance of the market as the old All Share Index despite including fewer companies.
For practical reasons the existing All Share Index will continue to be reported in the systems operated by Oslo Exchanges until the end of September 2001, but the Benchmark Index will be used for all data feeds and information provided to the market. The Oslo Exchanges web pages at www.ose.no, will report the Oslo Exchanges Benchmark Index in real-time, whilst all other indices will be reported with a 15 minute delay.
