MSE has been calculating its market index since 1995. The MSE Board of Directors has approved the revised ‘Rules on Index calculation’ by Resolution No.:2017/09 of 2017 and sent it to FRC for approval. The notable changes on the revised “Rules on Index Calculation” are as follows:

• Free floating shares of index constituents to be narrowed down

Index calculation based on the free floating shares is more accurate and therefore, our current calculation deducts the shares under state ownership from the total shares for index calculation purposes. In order to further improve the description of free floating shares, the share ownership of investors holding 5% or more of the total shares will also be deducted. 

• Tier I and Tier II index to be calculated in addition to TOP-20 index

MSE’s listed companies classified into Tier I, II and III based on the listing criteria. Introducing new indices based on Tier I and II companies will not only better demonstrate which Tier companies determine the market trend, but also facilitate the creation of first index-based products.

• MSE All index to be terminated

Most companies classified in Tier III are inactive and inclusion of such companies in the index calculation will hinder the accurate depiction of market trend, reducing the intensity of market growth or decline. As such, MSE All index calculation will be terminated.

• Index constituents to be renewed once a year

TOP-20 index constituents are renewed twice a year. Changing the frequency of updating the index constituents to once a year not only makes the practice in line with international standards but also offer more stability for the investment portfolio and reduce costs for those that are tracking the index.

MSE ‘Rules on Index Calculation’ will take effect upon the approval by the FRC.

MONGOLIAN STOCK EXCHANGE