ASX media release - ASX Index Review

14 January 1999

The Australian Stock Exchange (ASX) has today released a public consultation paper titled "Review of the All Ordinaries Index."

ASX is currently reviewing the rules which govern the construction of the All Ordinaries Index (AOI) to ensure that it continues to meet the needs of market participants.

Broad consultation is an important part of the review process, and the discussion paper is intended to provide interested parties with background on the AOI and the Australian stock market.

The paper contains a proposal to structure the All Ordinaries Index as a "Stapled Index" with the index series in two pools:

a). larger capitalisation stocks which are subject to rules similar to those that currently apply to the All Ordinaries Index; and

b). other capitalisation stocks which are subject to rules different from the first pool. Such rules would be based on market capitalisation and liquidity requirements appropriate for this pool.

This would result in a single broad market index through the "stapling" of the two index sub-sets. The stapled index would continue to be known as the ASX All Ordinaries Index.

The proposal was prepared with the help of the Index Advisory Panel, which draws on representation from investment institutions through the Investment & Financial Services Association and the Association of Superannuation Funds of Australia, asset managers and consultants, listed companies, stockbrokers, and the Sydney Futures Exchange.

"We greatly appreciate the input of the Panel, as it is important to have the Index accepted by the complete range of users," said ASX Managing Director Richard Humphry.

Comments or feedback are being sought from interested parties by 12 February 1999.

The "Review of the All Ordinaries Index" public consultation paper is available on ASX ShareNet.