The Korea Exchange announced on the 8th that it will release the 'KRX TMI (Total Market Index)', a market index reflecting both the KOSPI and KOSDAQ markets, on the 13th of this month. It will also unveil four types of KRX size-based TMIs for large-cap, mid-cap, small-cap, and micro-cap stocks.
The KRX TMI is composed of investment-grade stocks from the KOSPI and KOSDAQ markets, and the exchange noted that it adopts a free-float market capitalization weighting method to more accurately reflect the overall trend of the Korean stock market.
The existing KOSPI index was calculated based on the simple market capitalization weighting of all common stocks in the KOSPI market; however, it had limitations by including stocks that did not meet the eligibility requirements or non-liquid stocks. In contrast, the KRX size-based TMI is a comprehensive index classified without market boundaries based on the market capitalization size of individual stocks.
The new index starts at 1,000 points with the base date set to April 1, 2010, and regular adjustments will occur on the first trading day following the futures expiration dates in March, June, September, and December.
Large-cap stocks are classified as those in the top 94% by cumulative market capitalization, mid-cap as those excluded from KRX 300 among large-cap stocks, small-cap as those in the 94% to 99% range, and micro-cap as those with less than 99% cumulative market capitalization.
An official from the exchange said, "With the introduction of the KRX TMI, we provide a top-tier market index that encompasses the Korean stock market and have established a systematic and efficient index management system." They also added that this provides a foundation to compete with major global index providers.