Slovak Traded Index
The Slovak Traded Index (STX) belongs to a family of currently five indexes owned by the Vienna Stock Exchange (the so-called CECE Index family) that cover the emerging stock markets of the four Višegrad countries (Czech Republic, Hungary, Poland, Slovak Republic). It is intended to reflect the price dynamics of the most liquid Slovak stocks traded on the Bratislava Stock Exchange.
Like the other members of the CECE Index family, the STX has been constructed as a capitalization-weighted value ratio with daily chaining. Since the STX is intended to reflect only price changes caused by market fluctuations, the index is adjusted for technical price changes except for those due to dividend payments. If a stock is suspended from trading, the last available price is used for calculating the index.
Similar to the Austrian Traded Index (ATX), the STX incorporates stock-specific free float factors which are intended to ensure that the weight of a particular stock in the index roughly corresponds to the fraction of the registered capital that is actually available for public trading on the stock exchange. The free float factors are set to 0.5 for stocks with a free float equal to or less than 50% and to 1 otherwise. Despite these technical adjustments, due to its narrow base of only 7 stocks, the index suffers from an unbalanced structure with heavy-weight Slovnaft making up about 35% of total index capitalization, whereas two other companies account for less than 2% altogether.
In effect, a less than optimal index basket, coupled with a weaker interest by international investors in the Slovak stock market as compared to the other Višegrad markets, has sofar prevented the launching of the STX as an underlying for derivatives trading.
Slovak Traded Index: Vienna Stock Exchange, Vienna. Text: Institute for Advanced Studies, Vienna, 1998. All rights reserved.
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