S&P/ASX 200

The S&P/ASX 200 index is a market-capitalisation weighted and float-adjusted stock market index of Australian stocks listed on the Australian Securities Exchange from Standard & Poor's. It was started on 31 March, 2000 with a value of 3133.3,^[1] equal to the value of the All Ordinaries at that date.

The ASX 200 reached 6,000 points for the first time on Thursday 15 February 2007.^{[citation needed]}

Calculation

The ASX 200 is market-capitalization weighted meaning that a company's contribution to the index is relative to its total market value i.e. share price x number of tradeable shares. The ASX 200 is also float adjusted meaning that the absolute numerical contribution to the index is relative to the stock's value at the float of the stock.^[2]

Although the calculation starts with a sum of the market capitalisation of the constituent stocks, it is intended to reflect changes in share price, NOT market capitalisation. Therefore a fudge factor called the "Divisor" is used to ensure that the index value only changes when stock prices change, not whenever market capitalisation changes. For example, if a company increases its market capitalisation by issuing new shares, the Divisor is adjusted so that the ASX 200 index value does not change.

Eligibility

To be eligible for inclusion in the ASX 200 Index^[3] :

• Market Capitalization: A stock’s weight in the index is determined by the float-adjusted market capitalization of the stock. This is a function of current index shares, the latest available stock price and the Investable weight factor (IWF). The IWF represents the float-adjusted portion of a stock’s equity capital. Therefore any strategic holdings that are classified as either corporate, private or government holdings reduce the IWF which, in turn, results in a reduction in the float-adjusted market capital. Shares owned by founders, directors of the company, trusts, venture capitalists and other companies are also excluded. These are also deemed strategic holders, and are considered long-term holders of a stock’s equity. Any strategic shareholdings that are greater than 5% of total issued shares are excluded from the relevant float.

• Liquidity: The trading volume in terms of dollar value and the number of transactions must exceed at least 0.025% of the sum of all eligible securities' trading volume. To ensure that no single company dominates trading, they are capped at a maximum of 15% for value, volume and transactions.

• Listing: Only stocks listed on the Australian Stock Exchange will be considered for inclusion in any of the S&P/ASX indices.

Constituent companies

As at 19 November 2008, the constituent companies of the ASX 200 are^[4]:

See also

• Exchange Traded Funds (ETFs) listed on ASX, allowing tracking of S&P/ASX 50 & S&P/ASX 200

References

1. ^ "Aussie market breaks 5000 point barrier". Sydney Morning Herald. Fairfax Media. March 20, 2006. http://www.smh.com.au/articles/2006/03/20/1142703260196.html. Retrieved 2008-03-03. 
2. ^ "Index Mathematics Methodology" (PDF). Standard & Poor's. http://www2.standardandpoors.com/spf/pdf/index/Index_Mathematics_Methodology_Web.pdf. Retrieved 2008-03-03. 
3. ^ ASX 200 eligbility rules via Wikinvest
4. ^ "S&P/ASX 200 Constituent List". Standard and Poors. http://www2.standardandpoors.com/portal/site/sp/en/au/page.topic/indices_asx200/2,3,2,8,0,0,0,0,0,2,3,0,0,0,0,0.html. Retrieved 2008-11-19. 

External links

• Top 200 ASX companies in Market Cap (m) Order
• Top 20 ASX companies by Gain Today
• S&P/ASX 200 Implemented Index Additions and Deletions
• Constituent list 17 February 2006 (MS Excel)
• S&P/ASX 200 Index profile at Wikinvest