An index of some stock basket

### Stock basket index – An index of a certain stock basket expresses changes in the price of that basket. – The change in the basket price is displayed both in points and in percentages. – On the first day that you decide to track the price of a certain basket, the price of the basket is translated into 100 points or 100%. – From then on, the index in points changes every day, at the same rate at which the price of the basket changed. – If the index stood at 200 points on any given day and the price of the basket rose by 3%, the index will rise to 206 points. – Tracking of the Ha’af Index began on 1/1/1992, and of course it stood at 100 points at that time. ### Example of changes in the index – On 14.11.04 (end of day), the value of the basket stood at 222.9 million NIS and the index stood at 563.4 points.
– The next day, the value of the basket rose to 223.1 million NIS (+0.09%) and the index rose to 564.5 points (0.2%).
– The following day, the value of the basket rose to 224.2 million NIS (0.5%) and the index to 567.5 points (0.5%).
– When the change in the index is recorded in percentages, it expresses the percentage profit (loss) that each shekel invested in the basket yielded on average.
– Every shekel in the basket on November 14, 2004 yielded 0.2% the next day.
– Every shekel in the basket on November 15th yielded 0.5% the next day. ### Changes in the weight of companies in the basket – The weight of each company’s market capitalization changes daily as a result of the change in its share price. – When the price of a company’s shares increases by a higher rate than the rate of increase in the basket value, its weight in the basket increases. – When the price of its shares increases by a lower rate than the rate of increase in the basket value, its weight in the basket decreases. – If its share prices decrease by more than the basket price – its weight decreases, and if its share prices decrease by less than the basket price – its weight increases. – In Table 4.1, the weight of the “Teva” share changes over the days from 34.0% to 33.8% and 33.5%. ### Ceiling on the weight that a company can receive in the MAOF basket – The stock exchange decided that the weight of any company in the MAOF basket will not exceed 9.5%. – The weight of “Teva” which was supposed to stand at 34% on 14.11.04 has been stopped at 9.5%. – As if its market value on 14.11.04 is only 21.2 billion NIS (=9.5% of the basket value which stands at 222.9 billion NIS). – Deduct about 54.5 billion NIS from Teva’s market value and divide the amount of the deduction among the other companies proportionally to their market value. – In practice, the additions received by Bank Hapoalim also caused it to exceed 9.5%. – The amount of the deviation is divided again among the other companies, and God forbid, the same happens if an additional share deviates. – Table 4.2 shows the weights of the companies included in the basket before and after the correction.