Direct Answer
The BGBX40 is a rule-based measurement of Bulgarian large-cap equity benchmark, maintained by Bulgarian Stock Exchange. Like every index it owns nothing: it is a number produced by applying a published weighting formula to a selected list of companies, revised on a schedule the provider sets.
What this index covers
The BGBX40 covers Bulgarian large-cap equity benchmark, within the Bulgaria market. Bulgarian Stock Exchange defines which securities are eligible, how they are selected from that pool, and how much each one contributes to the published number.
The name states a target of 40 companies. A target is not a guarantee of the exact count on any given day: corporate actions, dual share classes and pending additions all move the real number around it.
How constituents are weighted
Market capitalisation weighted and adjusted for free float. A weight factor limits any issue to 10% of the index free float market value when the factors are set. Two versions exist: BGBX 40 leaves the divisor unadjusted for cash dividends and BGBX 40 TR adjusts it.
The weighting method is the single biggest driver of how an index behaves. Two indexes covering the same market can diverge for years purely because they weight differently, which is why comparing index levels without knowing the method tells you very little.
What qualifies for inclusion
Ordinary shares on the BSE Main Market. The 40 issues are ranked on number of transactions and median daily turnover over six months with equal weight, and ties go to the issue with more transactions. At most four companies of one economic group are admitted to the ranking.
Eligibility rules are the part of an index most readers never look at and the part that decides what it can possibly measure. A screen that excludes a whole sector, or admits only one listing venue, shapes the result far more than any day of trading does.
How long a listing must exist first
An issue must have traded on a BSE market for at least three months before it enters the index portfolio.
A seasoning rule is why a large new listing does not appear in an index the week it starts trading. It is a deliberate lag, and it means an index can under-represent a fast-growing part of the market for months at a time.
When the membership is revised
Ranking uses data as at 1 March and 1 September, and the Board decides at its first meeting after 2 March and 2 September. Changes take effect from the first session after the third Friday of that month, and free float factors are set on 2 June and 2 December.
Reconstitution is the one date an index changes shape by design rather than by price. Funds tracking it have to trade toward the new membership, which is why the schedule matters to anyone holding the tracker rather than only to the provider.
The rule that surprises people
An extraordinary rebalancing is possible if one issue exceeds 15% of the index free float and its annualised monthly volatility is above 250%, or exceeds 20% with volatility above 100%. A removed issue then sits out the next two regular reviews.
References
- Bulgarian Stock Exchange: Bulgarian Stock Exchange Rules for calculating the indices of Bulgarian Stock Exchange, as published 2020. Every rule described on this page is taken from this document.
Current BGBX40 constituents
Bulgarian Stock Exchange publishes and licenses the BGBX40 constituent list. Swoopr does not republish it here. The provider's own page is the authoritative source for current membership and weights.
Related reading
- All stock market indexes: how indexes are built, weighted and revised.
- Europe indexes: others covering the same region.
- Index concentration: measuring how much of an index sits in its largest holdings.
- Index rebalancing and inclusion effects: what happens to a stock when index membership changes.
Frequently Asked Questions
Who maintains the BGBX40?
Bulgarian Stock Exchange maintains the BGBX40 and publishes the methodology document that defines its eligibility and weighting rules.
What does the BGBX40 measure?
It measures Bulgarian large-cap equity benchmark. The index is a calculated number applying a weighting formula to a selected list of companies, and it holds nothing itself.
Where can I see the current BGBX40 constituents?
Bulgarian Stock Exchange publishes the current constituent list. Swoopr does not republish it, because index providers license constituent data and Swoopr holds no such licence.