Ukrainian Stock Market Index SB-50

Index SB-50 (last year)

Index PFTS - First Ukrainian
Stock Trading System (last year)

Index SB-50 (last 5 years)

Index SB-50 (since inception)

SB-50 is a proprietary index of the Ukrainian stock market created by SigmaBleyzer. Its calculation is based on the principles used by the major stock indices in the world. The history of SB-50 calculation covers the whole time of existence of the Ukrainian stock market. The SB-50 indices are calculated both in Ukrainian hryvnas and in US dollars.

Principles of SB-50 Calculation

To calculate SB-50 indices several fundamental solutions are used, which make the difference of SB-50 from the rest of Ukrainian indices. Due to these solutions, the SB-50 indices reflect the situation on the Ukrainian stock market more precisely.

The main difference of SB-50 from the rest of Ukrainian indices is the fact that stock prices for SB-50 are calculated using real transaction prices. Thus, the SB-50 indices are not sensitive to attempts of putting pressure on the market by means of setting quotes. Such attempts of manipulation are not infrequent on the Ukrainian market. Presently, only prices of transactions made in PFTS are taken into account, as there is no information about transactions made on the unorganized market.

Another important principle of SB-50 calculation is that when calculating capitalization only shares outstanding are taken into account. Shares in state property or collective property are not taken into account, neither are shares owned by strategic investors. As a result, any influence of large stakes that do not circulate on the market on the index is excluded.

The list of companies included in the SB-50 indices is formed according to strict criteria. These are as follows:

SB-50 indices include 50 issuers.
The list of companies is quarterly updated.
The indices include 50 issuers with maximum trading volume on secondary market in the last 12 months. Primary placement is not considered.

Strengths and weaknesses of SB-50

The SB-50 indices have a number of advantages, which distinguish them from other Ukrainian stock indices:

When calculating SB-50 only transaction prices are used. That is why the SB-50 indices reflect the market situation more precisely.
The SB-50 indices do not take into account stakes that do not circulate on the market. That is why the influence of large issuers having significant stakes in state or strategic investor’s ownership is limited. This is common practice for emerging markets indices, where privatization has not yet been finished and the share of state property is high.
The base of SB-50 indices is flexible and changes in accordance with changes on the market. Today, the Ukrainian market is deeply dependent on the privatization process. The result is that the demand for certain shares rises or falls sharply. The base of SB-50 indices quickly reacts to the changes in market situation, so the SB-50 indices include all the most liquid shares.
The SB-50 indices are calculated according to strict rules. These rules make subjectivity in the index calculation impossible. The value of the SB-50 indices depends only on the situation on the stock market!

At the same time, the SB-50 indices are not without certain weaknesses:

Only PFTS transactions are used in calculating the indices. Unfortunately, today the only transparent trading system in Ukraine is PFTS. Information about transactions on the secondary market other than PFTS (which is 75% of the market) is not available. As the Ukrainian stock market develops, this weakness of the SB-50 indices will disappear.
The average price of transactions made over the trading day is used as stock price. This is due to the technology and the form of provision of information about transactions used by PFTS.
The exact number of shares owned by strategic investors is not always known.