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1.) About hungarian stockexchange:

International Relations

The Budapest Stock Exchange looks back on significant developments in turnover and quality in the period of almost eight years since it was established. At the current level of its development, the institution must foster and establish more active and meaningful relations with the institutions of the international securities markets and exchange organizations, and exchanges abroad. Members of international organizations may profit not only from sharing the professional results of their various panels and from perpetual co-operation among members, membership adds prestige and strengthens international professional recognition. Furthermore, they may receive assistance in core operating issues of their own organizations from the both the associations and their fellow members.

Earlier on BSE was a correspondent member of only the International Federation of Stock Exchanges (FIBV). Based on the ideas outlined above, we acquired associate membership in the International Securities Markets Association (ISMA) in the first few months of 1998, and – as a self-governing organization – have been granted membership in the International Organisation of Securities Commissions (IOSCO). Raising the level of participation in FIBV is in progress.

After acquiring membership in international organizations and establishing bilateral contacts with exchanges, our main responsibility lies in maintaining and operating these relationships in a meaningful way and in involving the professional functions of the BSE in such co-operation. We think all that will eventually bring improvements to the quality of services offered by the BSE.
 

The BUX Index

It was already in the first year of operation after foundation in 1990 that the Budapest Stock Exchange saw the need for setting up an index of the equity section of the exchange to offer better and clearer information to investors. The immediate purpose was to create a ratio that allows investors to read actual market conditions, the degree and size of movement in prevailing market prices as reflected by a change in the value of the index. Acceptance by the media and investors of the index as a reliable means of orientation was a priority.

The BUX reflects the changes in arms length value (market price x number of ordinary stocks) of corporations included in the index basket. The index basket represents a theoretical, so called market portfolio, modeling the typical securities structure of the market as a whole. It reflects the changes in value of this package of securities as compared to basis date. In its resolution No. 109/1994, the Exchange Council of the BSE decided to finalize BUX and make it the official index as of January 1, 1995.

Demanded by investors, the need arose for the BSE to publish BUX as a prompt index that gives continuous indication of price movements within a single day. Intraday index calculation was launched on April 1, 1997.

The Budapest Stock Exchange Stock Index is an equity index weighted with capitalization with basis of 1000 points on January 2. 1991. The index takes dividend payments into account by assuming that investors will reinvest in full any dividend distributed by companies into the equities of one and the same company. The index treats changes in its basket by assuming that investors holding a portfolio corresponding in composition to the basket of the index will sell all of their equity holdings and will reinvest the proceeds in full in order to set up a portfolio that matches the composition of the new basket. Hence the index reflects the current yield realized since basis date.

Investor security dictates that any modification of the calculation of the index may be made in reasonably justified cases.

Inclusion in the BUX basket is limited to the ordinary stock of companies listed on and representing the highest capitalization and liquidity at the Budapest Stock Exchange. The number of securities in the basket of the index varies, but is restricted to a maximum of 25.

The composition of the index basket is reviewed twice a year (on April 1 and October 1). New listings may only be included in the index basket following a period of 3 exchange weeks. Inclusion in and removal from the BUX basket are subject to compliance a particular series with six out of eight ratios examined by the Exchange. The quantity of each equity series to be included in the index basket is set on March 24 and September 23 so that the proportion of the capitalization of no particular series calculated on the basis of closing price on that day should not exceed 15% of the total capitalization calculated for the quantities of the equity series included in the index on the particular day.

The Composition of the BUX Basket as of Apr 1, 2000:

BorsodChem, Danubius, DÉMÁSZ, EGIS, Fotex, Graboplast, Synergon, MATÁV, MOL, Mezõgép, NABI, OTP, Pannonplast, Pick, Primagáz, Rába, Richter Gedeon, TVK, Zalakerámia, Antenna
 
 
 

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