Exchange Announces 'Integrated Market Conditions and Indices by Market Size'

The Korea Exchange announced on the 8th that it will release the 'KRX TMI (Total Market Index)', a market index reflecting both the KOSPI and KOSDAQ markets, starting from the 13th.

Korea Exchange, Yeouido, Seoul. Photo by Jinhyung Kang aymsdream@

Four types of KRX size-based TMIs?large-medium, medium, small, and micro?will also be released simultaneously.

The Korea Exchange explained that the KRX TMI is composed of investable eligible stocks across the entire KOSPI and KOSDAQ markets and adopts a free-float market capitalization weighting method, enabling it to provide more accurate market information for the overall Korean market.

The existing KOSPI index covers all common stocks in the securities market and uses a simple market capitalization weighting method, which has limitations as it includes illiquid stocks without eligibility requirements.

The KRX size-based TMIs will additionally calculate integrated market size indices classified solely based on the market capitalization size of individual stocks, regardless of their market affiliation.

These indices are set with a base point of 1000 as of April 1, 2010, and regular revisions occur four times a year on the trading day following the futures expiration dates in March, June, September, and December.

The stocks include all KOSPI and KOSDAQ listed stocks except ineligible ones. Among these, large-medium stocks account for those with a cumulative market capitalization of 94% or more; medium stocks are those excluding KRX300 stocks within the large-medium category; small stocks cover those with a cumulative market capitalization between 94% and 99%; and micro stocks are those with less than 99% cumulative market capitalization.

A Korea Exchange official stated, "Through the calculation of the top-level market and benchmark indices reflecting the entire Korean market, we have established an efficient and comprehensive index system," adding, "This marks the foundation for developing a more systematic and competitive index, similar to major overseas index providers."