Comparison between Baltic bourses easier to do

1999-05-20

With the introduction of the LITIN-10 price index on the Lithuanian National Securities Exchange, it has become easier to compare the performances between the three Baltic bourses.

The LITIN-10 joins the Riga Stock Exchange's RICI and the Tallinn Stock Exchange's TALSE indexes. Previously, the Vilnius bourse provided only capitalization and list-based indexes.

The LITIN-10 includes the top 10 trading shares from the official and current lists. The TALSE, RICI, and LITIN-10 capture about 70 percent to 95 percent of turnover, giving accurate pictures of the price movements of their overall markets.

The new Lithuanian index Litin-10 is a price index only. Share turnover, the volume of an issue, capitalization and modifications regarding dividends are not incorporated into index calculations.

Share inclusion into the index base is administered under the Exchange Management Board's decision every quarter. Participation in the index base is determined by the top 10 shares that are most actively traded on the exchange. The number of an issue's shares included in the index base is set according to the number of shares of that issue which can be acquired, at that day's market price, using an acquisition amount of LTL 1,000 per issue, on the day of index calculation.

The formula is LITIN-10(i) = (SUM(Pti-Qbi)/(SUM(Pbi-Qbi)) * 1000 Qbi.

Pbi - the market price of a share at the moment when the calculation of the index starts. Pti - the market price of a share at time t. Qbi - number of shares of the publicly traded issue included in the base index. The price of the Litin-10 index is calculated during continuous trading on the exchange, while the day's closing price is regarded as the total day's value. Thus, two historical data bases of the index are collected: that of continuous trading and that of the trading day's final transaction price. The calculation period is 20 minutes. The index value equals 1000 at the time when the index calculation was inaugurated (Jan. 4, 1999). The Litin-10 base includes the shares of the following companies: AB Vilniaus Bankas, AB Bankas Hermis, AB Birzu akcinu Pieno Bendrove, AB Kalnapilis, AB Rokiskio Suris, AB Snaige, AB Lietuvos Energija, AB Mazeikiu Nafta, AB Lietuvos Jura Laivininkiste, AB Ukio bankas.