The management board of Warsaw Stock Exchange (WSE) has withdrawn its plans to ditch the WIG20 benchmark as previously announced.

The WSE said in January that the expansion of the portfolio of the WSE’s main stock index would imply modifications to existing index-based derivatives, and that a new benchmark, the WIG30, would replace currently listed WIG20 futures and options.

The Polish exchange also said that the migration from the currently listed derivatives to new derivatives would begin in late 2014 and included the parallel listing of WIG20 derivatives and WIG30 derivatives for a certain period.

However, the management board of the exchange has decided to keep the WIG20, the price index that groups the 20 most liquid stocks listed on WSE, and it will remain the main underlying index and new derivatives based on the benchmark will be developed.

“The vast majority of our clients stress that the WIG20 remains the main reference index for them,” said Paweł Tamborski, president of the management board of WSE. “At the same time, we don’t want to discontinue the WIG30 because we believe that the companies in the index portfolio are attractive to investors and consequently we want to promote them, among others on foreign markets.”

WIG30
At the same time, the WIG30 will continue to be published but no derivatives on the WIG30, which were aimed at being launched in December this year, will be developed.

“The WIG30 has its value on the market; however, our analysis clearly suggests that the WIG20 is the underlying of financial instruments and that we need to continue the mWIG40 and reactivate the sWIG80,” added Tamborski. “This is the pragmatic approach to the market which we want to pursue.”

The decision to maintain the WIG20 as the underlying of financial instruments will impact the small and mid-cap indices linked to it, i.e., mWIG40 and sWIG80. The mWIG40 will continue to be published while sWIG80 (currently calculated as an investment fund benchmark under the name of MiS80) will be reactivated as of the beginning of next year.

At the same time, the exchange  said that the WIG50 and WIG250, which were launched in March 2014, will no longer be published as of the beginning of 2015. This means that WIG50 futures contracts will not be introduced into trading.

The WIG50 index, which was launched to eventually replace the mWIG40, includes 50 stocks listed on the exchange’s main market. The WIG250 index includes up to 250 small-cap stocks also listed on the WSE main market.

SRP data shows that the WIG20 index has been featured in more than 950 structured investments across jurisdictions of which more than 130 are still live structures. The WIG30 has been deployed in 20 structures since its inception

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