A letter of intent to launch a new joint regional price index have been signed by the CEOs of Poland, Czech Republic, Slovakia, Hungary, Croatia, Romania and Slovenia stock exchanges.
The index portfolio will include more than 100 of the largest and most liquid stocks listed on the stock exchanges of the participating countries and it will be calculated by the Warsaw Stock Exchange (WSE). Stocks in the new index have to meet certain liquidity benchmark and the average value of trading per session has to be at least EUR 90,000 in a six months period. The index basket will be free float based and capped according to the 5/10/40 rule (i.e. participation of the biggest stock is capped at 10%, aggregate participation of stocks weighing more than 5% is capped at 40%). The participation of stocks from any single country in the index portfolio will be capped at 50%.
The new index will be calculated daily in local currencies of participating countries, in Euro and in US dollar.
Impact: The launch of the new index will broaden the scope of regional investment possibilities.