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- The weight of each share in the leading stock indices will be based on the public's holdings ("free float"), according to international standards, rather than on market cap. However, the twice-yearly rebalancing process selecting the shares participating in the indices will continue to depend on the share's market cap.
- The TASE will update the quantity of each share in the index on a quarterly basis on the first trading day in each quarter, rather than each day as has been the practice so far.
The indices applicable to the new calculation method are those calculated on a continuous basis, such as the TA-25 index and the TA-100 index. All other TASE indices will continue to be calculated by the previous method (weight is calculated by market cap, and the amount of shares is updated daily).
On Thursday, January 31, 2008 (the day before the change comes into effect) the TASE will be extending the pre-closing phase to 45 minutes, to ease the transition between the calculation methods. On that day the closing phase will begin at a random moment between 16:45 to 16:46.
"Weighting the indices by public holdings is designed to increase the shares' liquidity," said Dror Shalit, Senior VP and Head of the Trading and Clearing Department. "The shares included in the TA-25 index, in which the public holds more than 44%, will benefit from the change: their weight in the index will increase, while the weights of companies in which the public holds less than 44% will drop".
For the composition of Stock Exchange indices please click here
