Investment products based on the new Eurobank MidCap Ρrivate Sector 50 Index
In order to render the new index investable, EFG Eurobank has decided to create the following financial vehicles:
- A new equity mutual fund, the “Eurobank MidCap Private Sector 50” fund, which will be an index-tracking fund based on the newly defined Index.
Τhe new mutual fund will be seeded by EFG Eurobank with a substantial sum of up to 30 million euros, as well as by owners of the companies that are included in the new Index.
- Structure Products and Derivatives based on the Eurobαnk MidCαp Privαte Sector 50 Index. These products will complement the mutual fund and will allow investors to take direct exposure to the index, with or without leverage. EFG Eurobank intends to create futures on the new Index, and towards this end the bank has already submitted a petition to the Athens Derivatives Exchange. The futures on the new Index will help to improve the liquidity of the Index and of its constituents, and will also act to attract foreign investors.
In addition, EFG Eurobank is committed to the following actions in order to actively support the new initiative:
- Systematically cover the new Eurobαnk MidCαp Privαte Sector 50 Index and its constituent companies, and produce research through EFG Eurobank Securities.
- Use the new Index and its derivative products to increase the awareness and the interest of foreign investors in the mid-cap sector of the Greek equity market.
- Promote the Index and its derivatives to a broad range of investors through the bank’s extensive distribution network in Greece and abroad.
- Act as a market-maker for the Index derivatives.
- Promote and market the Index to institutional investors.
α. Inclusion rules
- Constituents of the Eurobank MidCap Private Sector 50 Index must be shares listed in the Athens Stock Exchange.
- Shares that belong in the financial sector (banks, insurance, leasing companies, exchanges, etc) are excluded from the Index. Shares that are subsidiaries of financial-sector companies are also excluded from the Index, when ownership is greater than 50%.
- Shares that belong to state-owned companies are excluded. A company is excluded when the Greek State owns or controls more than 20% of that company, directly or indirectly (state companies, government-sponsored enterprises, etc). The participation percentages are obtained from the Athens Stock Exchanges Department of Company Compliance.
- The market capitalization of each company must be up to 1 billion euros.
- The free float factor of each company must be 15% or greater.
- Shares that fit the above criteria are sorted in descending order based on the market capitalization as of the last trading day of September 2004. The Index is then defined by the first 50 shares, where the weight of each share is equal to the ratio of its market capitalization to the total market capitalization of the Index (market-capitalization weighted Index).
b. Index restructuring and rebalancing
- Restructuring and rebalancing of the Index will occur two times during each calendar year, based on the data as of the last trading day of March and September. The resulting changes will take effect at the close of the last trading session of May and November respectively.
- On each index-restructuring day (September and March), all qualifying shares (excluding any free-float limitations) will be sorted by market capitalization.
- Companies that already belong in the Index but that have dropped in the 71st place or below in this new ranking, will be removed from the Index.
- Companies that already belong in the Index but whose market capitalization now exceed 1.2 billion euros, will be removed from the Index.
- Every share that is removed from the Index will be replaced by the highest positioned share in the new ranking that is not already included in the Index.
- In the event of a share removal due to replacement, merger, restructuring or buyout, a new share will be added from the top position (51st, 52nd, etc) of the list that was derived during the previous evaluation period (March or September).
- Any change in the Index will occur simultaneously (removal of a share – inclusion of new qualifying share) at the start of the first business day that follows the day of the announcement of the event that has caused a share to be removed.
Through this initiative EFG Eurobank wishes to purposely demonstrate its confidence in the Greek private sector and capital markets, which together constitute the country’s main vehicle for economic development. The Bank intends to pursue its leadership role by presenting, in collaboration with other institutions, new initiatives to support the capital markets and to highlight the potential of Greek private companies.