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- The WSE has initiated consultations on modification of the index of major companies.
- The Exchange has proposed to replace WIG20 with WIG5 and WIG30.
- WIG30 is proposed as an index tracking the performance of major companies while WIG5 is to be the underlying of new derivatives.
In the past few days, the Exchange has initiated consultations on modification of the index of major companies on the WSE. An official request for opinions on potential replacement of WIG20 with WIG5 and WIG30 has been addressed to capital market organisations. The intention of the authorities of the Exchange is to learn the position of particular organisations as a basis of further decisions of the Exchange Management Board in this area.
The WSE’s proposal is to replace WIG20 with two indices designed to serve different functions. WIG30 is to be an index tracking the performance of major companies listed on the Warsaw Stock Exchange. WIG5 is designed as a product index to be used as the underlying for new derivatives to be listed on the WSE. The proposals under discussion would also naturally imply modifications to existing derivatives for which exchange indexes are the underlying. The WIG20 futures, options and index participation units currently listed on the WSE would be replaced by analogical instruments with WIG30 as the underlying.
According to the preliminary assumptions, the methodology of both indices would be consistent with the WIG20 methodology, however calculated as a total return index. Index participants would be companies with the greatest liquidity and value of free-float shares.
“The main goal of the modifications under discussion is to stimulate the market by improving the liquidity of both the equities market and the derivatives market. However, the WSE’s proposal derives from a much broader discussion on the strategy of growth of the equities and derivatives markets and the transaction costs of derivatives which at this time are a major barrier to the growth of the segment,” said Mr Adam Maciejewski, CEO and President of the Warsaw Stock Exchange.
