Ukrtelecom Included into KP-Dragon Index as a New Compontent Stock
Kyiv, February 4, 2003 – The Kyiv investment bank Dragon Capital and the Kyiv Post, Ukraine’s leading English-language publication, today announced that Ukrtelecom, Ukraine’s largest telecommunications company, was included in the KP-Dragon Index as a new component stock.
Revision of the KP-Dragon components came soon after Ukrtelecom got listed on the PFTS, Ukraine’s principal stock exchange, and its shares started to trade actively. Ukrtelecom replaced Dniprooblenergo, the least liquid stock in the 10-component KP-Dragon.
Due to Ukrtelecom’s large market capitalization as compared with the other KP-Dragon Index stocks, we also adopted a new approach to weighting index components. The stocks in the index will now be weighted by their free float capitalization rather than by total market capitalization. As a result, as of February 3 Ukrtelecom had the second largest weighting of 18.1% within the index, behind Ukraine’s oil monopoly, Ukrnafta, with 18.3%.
Ukrtelecom’s free float, estimated by Dragon Capital, is part of a 7.14% stake that was sold during preferential subscription for Ukrtelecom shares last year. The remaining shares in the company remain state-owned, with a stake of nearly 43% slated for privatization in 2003-04.
Dragon Capital, in cooperation with the Kyiv Post, Ukraine’s leading English-language newspaper, launched KP-Dragon in August 2000. Since then the index became the leading tool for tracking performance of the Ukrainian stock market. Last year the British financial magazine Euromoney recognized KP-Dragon as “the first reliable index in the Ukrainian market,” citing its development as one of the reasons for awarding Dragon Capital its Best Equities House in Ukraine 2002 accolade.
The KP-Dragon Index is calculated daily, at the close of PFTS trading. It uses the official prices reported by PFTS, but these can be adjusted by Dragon’s traders if there is an obvious anomaly. The index base was set at 1,000 on May 5, 1997. This starting date was chosen because only then were Ukraine’s financial markets developing the liquidity needed to make an index meaningful.
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