Asia index to modify methodology for BSE AllCap index

Leading index provider Asia Index has decided to revise the methodology for S&P BSE AllCap index as well as its sub-indices, from September.
Under the new methodology, the rebalancing reference dates for the indices would be taken as the last trading date of January, April, July and October.
Currently, third Friday of the month before the rebalancing date was taken for reference.
Moreover, under the new method stocks for the indices would be selected if they have an investable weight factor (IWF) greater than or equal to 10 per cent, as of the "rebalancing effective date".
Presently, the eligibility criteria allows stock which had (IWF) greater than or equal to 10 per cent, as of the "rebalancing reference date", to be eligible for the indices.

"Asia Index announces methodology changes to the S&P BSE AllCap, Size, and Sector Indices," a BSE notice said today.

"The changes will be implemented with the September 2017 rebalancing," it added.
The S&P BSE AllCap is a comprehensive, rules-based index that seeks to measure the performance of the Indian stock market.
The index is divided into five size-based indices -- S&P BSE LargeCap, S&P BSE MidCap, S&P BSE Large MidCap, S&P BSE SmallCap and S&P BSE MidSmallCap.
Further, it has 10 sector-based indices for Basic Materials, Consumer Discretionary Goods & Services, Energy, Finance, FMCG (Fast Moving Consumer Goods), Healthcare, Industrials, Information Technology, Telecom and Utilities.

Rebalancing involves periodic checking of an index to see if it still accurately represents its underlying stocks' fundamentals such as their earnings and dividends.