The Stock Exchange of Thailand (SET) has amended the the selection criteria for SET50 and SET100 indices, basing on 3 month average daily market capitalisation rather than the 12-month criteria.
It said this would reflect the market value.
Under the previous rule, the
size of eligible stocks is screened from the last 12 months of market
capitalization; however, the new rule will draw only last 3-month
record to represent the most recent and reasonable market size of the
constituents, said Kesara Manchusree, SET Group Head, Markets Division.
According to the SET, due to the volatility of stock market, the 12-month historical period of data has not represented the current market size of the securities. The criteria is
only adjusted the period of historical market capitalization data while others
remain unchanged. The amendment will help reduce the gap between data
variation and the most updated status of the company.
Moreover, the shorter historical period of market capitalization is applied in
accordance with other international index providers as well as some market
comments. Besides, the SET50 and SET100 indices will be more attractive and
efficient to use as benchmarks. The revision will be effective on the first
half of 2011 periodic review onward. The SET will announce the list of
components selected under the new criteria in December 2010, and every six
months thereafter.