Tehran Stock Exchange Introduces Its New Blue Chip Index (TEFIX30)

TEFIX30 will track 30 leading companies at TSE in terms of free-float market capitalization and liquidity, and measures the performance of these companies.

The index was designed to show the overall trading trend of TSE’s listed companies and encompasses shares of 30 companies among 100 large companies with the highest trading value.

It will provide a set of tools for investors to benchmark blue-chip companies and measure the performance of portfolio managers and investment funds. It also provides the potentials for designing investment products such as exchange traded funds (ETFs) and index-based derivatives instruments that Tehran Stock Exchange has planned to introduce this year.

TSE will select TEFIX30 components among 100 large TSE listed firms according to the criteria such as market capitalization and liquidity, on the condition that the firm has been listed and traded for at least 3 months. Also, monthly trading value of the index’s incumbent shares in the past six months needs to be more than 25 percent of the average monthly trading value of the 100 large companies in the same period, and the percentage of its free floated shares should not be less than 10 percent.

TEFIX30 will be weighted by the free-float market capitalization and will be reviewed quarterly. The weights of individual stocks will be capped at 15 percent of its market capitalization, in order to prevent the index to be dominated by certain securities.

This index was designed by Tehran Stock Exchange and approved by Iran’s Exchange Supreme Council at August 17, 2010. Base date of TEFIX30 is August 23 and the initial value was set as 1000 points.

Currently, TEFIX30 is calculated based on total return (price and dividend), and its price index will be shortly provided.