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Introducing the Nairobi20 Stock Index
Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Hey folks I have come up with my own index...i noticed several shortcomings with the NSE20 which is a market cap weight index, one of the things I noticed EABL & Safcom influence the index heavily while the banking sector has little influence thus it does not represent the true picture of the market. The Nairobi20 Stock Index is a price weighted index The Nairobi20 stock Index is made up of Safaricom, Jubilee, Equity Bank, Standard Chartered, Barclays, Sasini, KCB, Kenya Power, Kenol, KQ, TPS, Centum, Williamson Tea, BAT, CMC, Mumias, EABL, Uchumi, Bamburi and NMG. The Nairobi20 Stock index closed at 77.05 yesterday. It will be tracked at http://contrarianinvestingkenya.info
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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How to use the Index:-
1.An investor can either buy the entire index and track his portfolio using the index
2. He/She can buy a few selected stocks in the index and gauge the perfomance of his portfolio against the index
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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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The NSE-20 is equi-weighted GOD BLESS YOUR LIFE
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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the deal wrote:Hey folks I have come up with my own index...i noticed several shortcomings with the NSE20 which is a market cap weight index, one of the things I noticed EABL & Safcom influence the index heavily while the banking sector has little influence thus it does not represent the true picture of the market. The Nairobi20 Stock Index is a price weighted index The Nairobi20 stock Index is made up of Safaricom, Jubilee, Equity Bank, Standard Chartered, Barclays, Sasini, KCB, Kenya Power, Kenol, KQ, TPS, Centum, Williamson Tea, BAT, CMC, Mumias, EABL, Uchumi, Bamburi and NMG. The Nairobi20 Stock index closed at 77.05 yesterday. It will be tracked at http://contrarianinvestingkenya.info NSE-20 is NOT capitalisation-weighted. It is a simple price index without any weighting. Check with the NSE for the formula and you will see for yourself. Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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@Mukiha get your facts right please.
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Rank: Chief Joined: 3/24/2010 Posts: 6,779 Location: Black Africa
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youcan'tstopusnow wrote:The NSE-20 is equi-weighted Yaani all stocks are given equal weight. GOD BLESS YOUR LIFE
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Rank: Veteran Joined: 5/23/2010 Posts: 868 Location: La Islas Galápagos
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the deal wrote:Hey folks I have come up with my own index...i noticed several shortcomings with the NSE20 which is a market cap weight index, one of the things I noticed EABL & Safcom influence the index heavily while the banking sector has little influence thus it does not represent the true picture of the market. The Nairobi20 Stock Index is a price weighted index The Nairobi20 stock Index is made up of Safaricom, Jubilee, Equity Bank, Standard Chartered, Barclays, Sasini, KCB, Kenya Power, Kenol, KQ, TPS, Centum, Williamson Tea, BAT, CMC, Mumias, EABL, Uchumi, Bamburi and NMG. The Nairobi20 Stock index closed at 77.05 yesterday. It will be tracked at http://contrarianinvestingkenya.info Now i know your favorites! A bad day fishing is better than a good day at work
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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the deal wrote:@Mukiha get your facts right please. Here is the formula from the NSE booklet I downloaded in 2009: I[t] = I[t-1] * 20th-root-of ({P[1 t]/P[1 t-1]} * {P[2 t]/P[2 t-1]} * .... * {P[20 t]/P[20 t-1]}) Where: I[t] = index at time t I[t-1] = index at time t-1 P[j t] = price of stock j (i.e., 1, 2, 3, 4, .... 20) at time t P[j t-1] = price of stock j at time t-1 You see it is just an average of prices. There is no mention of capitalisation. Unfortunately, this booklet is not available in the new-look NSE website, otherwise I'd have given you the link. Now go check you facts and let's compare. Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Veteran Joined: 5/23/2010 Posts: 868 Location: La Islas Galápagos
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mukiha wrote:the deal wrote:@Mukiha get your facts right please. Here is the formula from the NSE booklet I downloaded in 2009: I[t] = I[t-1]*20th-root-of ({P[1 t]/P[1 t-1]} * {P[2 t]/P[2 t-1]} * .... * {P[20 t]/P[20 t-1]}) Where: I[t] = index at time t I[t-1] = index at time t-1 P[j t] = price of stock j (i.e., 1, 2, 3, 4, .... 20) at time t P[j t-1] = price of stock j at time t-1 You see it is just an average of prices. There is no mention of capitalisation. Unfortunately, this booklet is not available in the new-look NSE website, otherwise I'd have given you the link. Now go check you facts and let's compare. Both approaches are misleading to a strategic investor since we do not buy into the 20 counters in the prescribed ratios. If I bought into Mumias when it was Mumias,I would have lost 50% while the indices only retreated 20%. A bad day fishing is better than a good day at work
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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mukiha wrote:the deal wrote:@Mukiha get your facts right please. Here is the formula from the NSE booklet I downloaded in 2009: I[t] = I[t-1] * 20th-root-of ({P[1 t]/P[1 t-1]} * {P[2 t]/P[2 t-1]} * .... * {P[20 t]/P[20 t-1]}) Where: I[t] = index at time t I[t-1] = index at time t-1 P[j t] = price of stock j (i.e., 1, 2, 3, 4, .... 20) at time t P[j t-1] = price of stock j at time t-1 You see it is just an average of prices. There is no mention of capitalisation. Unfortunately, this booklet is not available in the new-look NSE website, otherwise I'd have given you the link. Now go check you facts and let's compare. @Mukiha since you are an elder i will save you from the bashing  you need to read further http://www.bloomberg.com...quote?ticker=KNSMIDX:IND
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Rank: Member Joined: 2/25/2010 Posts: 158
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Can somebody tell me how to buy an index. If current price is 77.08 does it mean i can purchase a minimum shares of the index (100)? If so how are divided distributed when one buys the whole index> Keeping it all in the family
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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The Nairobi20 Stock Index closed lower today, the measure lost 0.10% to close at 76.97
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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anika66 wrote:Can somebody tell me how to buy an index. If current price is 77.08 does it mean i can purchase a minimum shares of the index (100)? If so how are divided distributed when one buys the whole index> The index is not a company so you can not buy shares in it but you can model your portfolio around it I.e buy all the 20 stocks and offer them equal wait in your portfolio I.e 25K in each stock or you can buy I.e 3 companies that are in the index and then gauge their perfomance against their index.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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the deal wrote:mukiha wrote:[quote=the deal]@Mukiha get your facts right please. Here is the formula from the NSE booklet I downloaded in 2009: I[t] = I[t-1] * 20th-root-of ({P[1 t]/P[1 t-1]} * {P[2 t]/P[2 t-1]} * .... * {P[20 t]/P[20 t-1]}) Where: I[t] = index at time t I[t-1] = index at time t-1 P[j t] = price of stock j (i.e., 1, 2, 3, 4, .... 20) at time t P[j t-1] = price of stock j at time t-1 You see it is just an average of prices. There is no mention of capitalisation. Unfortunately, this booklet is not available in the new-look NSE website, otherwise I'd have given you the link. Now go check you facts and let's compare. @Mukiha since you are an elder i will save you from the bashing you need to read further http://www.bloomberg.com...uote?ticker=KNSMIDX:IND[/quote] I'm afraid Bloomberg is wrong on this one. Since you are mathematically knowledgeable, why not test the formula I have given above. You will see that it yields the correct index for a given day. Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Elder Joined: 6/27/2008 Posts: 4,114
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the deal wrote:mukiha wrote:[quote=the deal]@Mukiha get your facts right please. Here is the formula from the NSE booklet I downloaded in 2009: I[t] = I[t-1] * 20th-root-of ({P[1 t]/P[1 t-1]} * {P[2 t]/P[2 t-1]} * .... * {P[20 t]/P[20 t-1]}) Where: I[t] = index at time t I[t-1] = index at time t-1 P[j t] = price of stock j (i.e., 1, 2, 3, 4, .... 20) at time t P[j t-1] = price of stock j at time t-1 You see it is just an average of prices. There is no mention of capitalisation. Unfortunately, this booklet is not available in the new-look NSE website, otherwise I'd have given you the link. Now go check you facts and let's compare. @Mukiha since you are an elder i will save you from the bashing you need to read further http://www.bloomberg.com...uote?ticker=KNSMIDX:IND[/quote] I'm afraid Bloomberg is wrong on this one. Since you are mathematically knowledgeable, why not test the formula I have given above. You will see that it yields the correct index for a given day. Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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mukiha wrote:the deal wrote:mukiha wrote:[quote=the deal]@Mukiha get your facts right please. Here is the formula from the NSE booklet I downloaded in 2009: I[t] = I[t-1] * 20th-root-of ({P[1 t]/P[1 t-1]} * {P[2 t]/P[2 t-1]} * .... * {P[20 t]/P[20 t-1]}) Where: I[t] = index at time t I[t-1] = index at time t-1 P[j t] = price of stock j (i.e., 1, 2, 3, 4, .... 20) at time t P[j t-1] = price of stock j at time t-1 You see it is just an average of prices. There is no mention of capitalisation. Unfortunately, this booklet is not available in the new-look NSE website, otherwise I'd have given you the link. Now go check you facts and let's compare. @Mukiha since you are an elder i will save you from the bashing you need to read further http://www.bloomberg.com...uote?ticker=KNSMIDX:IND[/quote] I'm afraid Bloomberg is wrong on this one. Since you are mathematically knowledgeable, why not test the formula I have given above. You will see that it yields the correct index for a given day. Mzee I will show you kesho...btwn NSE20 was down 0.2% today while Nairobi20 index was down 0.1%...Nairobi20 is more diversified and less volatile than NSE20...wait and see...
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Rank: Elder Joined: 9/23/2009 Posts: 8,083 Location: Enk are Nyirobi
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Quite a debate on the NSE index. I belief it was changed from cap weighted around the time that the all share index was introduced. Life is short. Live passionately.
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Rank: Veteran Joined: 3/25/2011 Posts: 946
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And what formula do u use to calculate this nairobi20 index. ??
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Rank: Elder Joined: 9/25/2009 Posts: 4,534 Location: Windhoek/Nairobbery
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@Mukiha read further here please http://cfa-studynotes.bl...weighted-and-value.html @QW the Nairobi20 Stock Index is an arithmetic average.
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Introducing the Nairobi20 Stock Index
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