official indexes are calculated by the Copenhagen Stock Exchange: the
KFX and the Total Share Index. Since its introduction in 1989, the KFX
became the leading representative of the price dynamics of Danish stocks.
Adjustments of the index are aimed at securing that the KFX is not altered
as a result of stock price changes other than those originating from
changes in supply and demand.
The index portfolio
is determined in November each year from among the stocks included in
the calculation of the Total Share Index. Since unit trusts, foreign
companies, and certain holding companies are not included in the total
index, they are not eligible for the KFX either. The selection procedure
is as follows:
For each trading day during the 12-month period prior to the selection
date the 25 most active stocks are ranked according to turnover; for
initial public offerings and new classes of stock that are listed
for at least 40 trading days prior to the selection date, the number
of days during the reference period in which the stock is ranking
among the 25 most active stocks is multiplied by the number of days
of the year and divided by the number of days that particular stock
has been listed on the Copenhagen Stock Exchange. This procedure ignores
the first five days of listing, however, since after the first listing
a non-representative high trading activity may occur in the respective
- On the basis of the daily ranking
during the reference period, the final list of the 25 most liquid
stocks is prepared. This list contains the stocks which are most often
ranking among the top 25 stocks according to liquidity.
- From this "basic portfolio", 21 stocks
are selected according to their market capitalization to constitute
the so-called "active portfolio" of the KFX. Index adjustments are
carried out in the case of stock replacements, suspensions from trade
that last for a longer or indefinite period of time, seasoned issues,
and mergers and acquisitions.