Belgian 20 Price Index
BEL 20

The BEL 20 Index is the leading representative of aggregate price changes on the Brussels Stock Exchange. Serving as an underlying for options and futures contracts, it comprises 20 companies for which a continuous quotation is available on the NTS Forward Market. 

Similar to other stock indexes, the constituent stocks of the BEL 20 Index are selected by ranking all eligible stocks according to a composite criterion. In the Belgian case, the ranking is obtained by computing the arithmetic average of the turnover in and the market capitalization of each stock, with the former magnitude accounting for 60% and the latter for 40% of the composite criterion. Holding companies are not eligible for inclusion if their portfolio consists by more than 75% of BEL 20 stocks or if they are not ranked within the first 12 stocks. The constituents are not allowed to surpass a 10% threshold of the total value of the index basket for more than six consecutive months and limited to a maximum of 10% afterwards.

The sample of index stocks is subject to an annual revision in December. For a stock that was formerly not included in the index sample to displace a BEL 20 stock it is required to pass two conditions: First, it must rank before the outgoing stock and, second, the new stock must be ranked within the top 20 stocks for at least 8 months out of 12, judging according to a monthly ranking. This second condition is intended to enhance the stability of the index sample since candidates must prove a constantly high liquidity of trading before being eligible for inclusion. In some exceptional cases such as the delisting of a stock, the composition can be adjusted on a quarterly basis. If a constituent stock is suspended from trading for more than 2 trading days, the index steering committee is to consider a temporary suspension of the index calculation.

Belgian 20 Price Index: Brussels Stock Exchange. Text: Institute for Advanced Studies, Vienna, 1998. All rights reserved.

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