Question

“Dow Jones Industrial Average”, “Straits Times Index”, “Hang Seng Index”, “Nikkei Index”, “Shanghai Composite Index”. Analyse and discuss the following:-

(i) The market they represent

(ii) The weighting methodology

(iii) The number of component stocks

Answer 1

Dow Jones Industrial Average :

(i) It is traded on the NEW YORK EXCHANGE.

(ii) The DOW JONES is a price weighted Index.

(Iii) It is comprised of 30 stocks.

Straits Times Index:

(1) It is traded on the Singapore Exchange

(ii) This index is market value weighted.

(iii) It is composed of over 30 representative stocks

Hang Seng Index:

(i) It is traded on the Hong Kong stock exchange

(ii)It is free float adjusted market capitalisation

(ii) It is composed of 50 companies.

Nikkie Index:

(i) It represents the Japanese markets

(ii)It is composed of 225 blue chip companies

(iii) it is price weighted index

Shangai Composite Index:

(i)It is traded on the Shangai Stock Exchange

(ii)It is calculated using the Paasche weighted composite price index formula.

(iii)there is SSE -180 which consists of 180 stocks, SSE- 50 , which consists of 50 stocks and SSE - mega cap which consists of 20 stocks.