Approved by the Board of Governor's decree of November, 27, 2003
THE MONGOLIAN STOCK EXCHANGE STOCK INDEX COMPUTATION PROCEDURE
CHAPTER ONE.
GENERAL PROVISSION 1. An index of listed stock in the Mongolian Stock Exchange shall be regulated according to this procedure. 2. A terminology in the procedure shall be understood by following: Index- an indication that is reflected a price fluctuation in current time. Market capitalization- an indication is that calculated by multiplying a stock volume of a listed company by closing price of a stock in current day. Current market capitalization – the current market capitalization of stocks that are included into index lot. Base market capitalization – the market capitalization that is calculated based on the market capitalization of beginning day of a cash trading (august 28, 1995). New base market capitalization – the market capitalization in day that is made a correction when change is made in index lot.
3. MSE shall calculate the index once in every trading day by using network. 4. In this procedure an amendment shall be made by a decision of Board of Governors (BG).
CHAPTER TWO. INDEX CALCULATION CRITERIA, TYPE OF THE INDEX
5. A criterion indicator of the index calculation is a market capitalization of a company. 6. The market capitalization of a company shall be calculated according to this procedure. 7. Totally 2 type of indexes (a general index, a sub-index) shall be calculated. When calculate the index, companies with high market capitalization shall be chosen. 8. Two types of indexes (Top-20 index, composite index) are included in the general index. a. In calculation of Top-20 index, 20 leading companies with highest market capitalization shall be selected. b. The general index is calculated by the market capitalization of total listed companies in the MSE.
9. In Sub-index 5 type of indexes shall be calculated. In every sector lot is consisted of 10 companies that were leading by market capitalization of current day and previous day in current sector shall be selected. Index by sector: a. Agriculture –10 b. Mining –10 c. Industry –10 d. Trade & Service –10 e. Construction & Transportation -10 10. A list of a company that is selected in Top –20 and sub-index shall be renewed once a year. A lot is consisted of companies who have highest average market capitalization in last several years.
CHAPTER THREE.
COMPUTATION METHOD FOR INDEX
11. The index shall be calculated by following base formula. P X = ---------- * 100 C X- current day index P- current day market capitalization C- base market capitalization 12. The base market capitalization shall be made a correction when following changes have been appeared in type of the index. a. When changes have been appeared in index lot b. When changes have been appeared in a share volume of a company that was selected in index. A correction shall be made since above amendments were recorded in the central depository of the Securities Clearing Settlement and Depository House. 14. The new base market capitalization shall be calculated by following formula.
13.
P1 C1 = --------* C0
P0 C1 – new
base market capitalization C0- previous day base market capitalization P1 – current day market capitalization P0 – previous day market capitalization
15. The new base market capitalization shall be considered as the base market capitalization when the index is calculated in a correction day CHAPTER FOUR.
OTHERS 16. The previous day index shall be displayed on electronic display and computer display during a trading of the MSE. 17. The index shall be reported to a public by a press in every trading day. 18. When to report the index, current day index indicator shall be compared with previous day indicator. If it increased plus mark, if it decreased minus mark shall be marked before an every index.