UPCOM-Index is a basic but very important term that any investor when participating in the stock market must know. Understanding the UPCOM-Index will help you get a lot of information about stock investment in Vietnam. Let's explore this index right now with PHS.

Thumbnail Article Kien Thuc Chung 13What is the UPCOM-Index?

What is the UPCOM-Index?

On June 24, 2009, Hanoi Stock Exchange (HNX) officially launched upcom trading floor with 10 listed stocks. This exchange was established with the aim of facilitating unlisted businesses to participate in the market. At the same time, the UPCOM-Index was also born. Up to now, UPCOM has more than 500 stock codes.

UPCOM-Index is a stock index showing the price movement of all stocks on UPCOM, reflecting the capitalization value of companies listed on Upcom at the present time compared to the current value of shares. capitalization at the base date. The base time is calculated on June 24, 2009.

Formula for calculating UPCOM-Index

Calculate the UPCOM-Index by comparing the total current market value with the total market value of the listed stocks at the base date. At base time, the index has a value of 100.

Calculation formula:

UPCOM-Index = Total current market value (GTn)/ Total market value of listed stocks at the base time (GT0) x 100 or UPCOM-Index = ∑(pitqit)/∑(pi0qit)

Inside:

pit : Market price of stock i at the moment

qit: Number of listed shares of stock i at the moment

pi0: Market price of stock i at base time (base date)

i: stock i

Meaning of UPCOM-Index

During each trading session, the UPCOM-Index will be updated every 5 seconds. This will reflect the change in the value of the index during the trading session.

The UPCOM-Index helps investors get an assessment of the market, helping companies that are not eligible to participate in the HNX-Index still have the opportunity to raise capital from investors.

The UPCOM-Index is transparently published on the exchange's website to provide accurate information to investors. Good stocks on UPCOM-Index will have the opportunity to move to HNX or HSX.

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Update the new calculation of the index

On January 4, 2016, the Hanoi Stock Exchange officially applied a new calculation method for the UPCOM-Index. The new calculation has many similarities with the old calculation. However, some notable changes are as follows:

  • The new calculation of the index only applies to qualified stocks traded on the exchange.
  • Stocks that are not included in the index include: government-held shares, restricted-transfer stocks, and founder-restricted shares.

These changes help the UPCOM-Index reflect more accurately and contribute to increased liquidity.

How to choose stocks?

Should only choose any corporate stock code listed on UPCOM is correct. At the same time, the Free – Float ratio needs to be >= 5%. Stocks that do not meet these two conditions cannot be indexed.

In addition, you also need to know the operating notes, the interaction between stocks and indexes to perform the best. When a new stock code joins UPCOM, the index will automatically update for you.

In particular, the operation of deleting and editing shares will take place quarterly. Free-Float will be added, removed, changed once every quarter. Shares that are no longer valid will be discarded without waiting until the end of the quarter. Invalid cases such as: stop trading, merge with other units or cancel the right to list.

However, even though they didn't last until the end of the quarter, these stocks were still on the floor for 10 days. It will then be delisted from the UPCOM-Index.

Conclusion

Thus, you have learned about what UPCOM-Index is and related issues. From calculation, meaning to how to choose stocks for this index. PHS hopes to have analyzed it enough for you to decide whether to use this indicator or not. Wish investors will reap much success and continue to support PHS's articles!