The KP-Dragon Index was launched in August 2000 as a market capitalization-weighted index consisting of 10 most liquid Ukrainian stocks. We moved to free-float weightings in February 2003 after large-cap Ukrtelecom was added to the index. The KP-Dragon was expanded to 20 stocks in February 2006 to reflect the growing domestic market and the increased number of sufficiently liquid stocks.

On June 1, 2011, we rebalanced the index to include a number of foreign-listed Ukrainian stocks and thus better reflect the entirety of Ukrainian equities traded locally and on European exchanges (in addition, this differentiated the KP-Dragon from other indices including Ukrainian stocks since the latter are linked to a particular exchange or country and calculated mostly in respective local currencies). With the size of the index basket remaining unchanged (20 stocks), we left 13 Ukrainian-listed stocks in the index and added seven companies listed abroad.

At this point, we continue to calculate the index on a daily basis. For calculation purposes, we convert all closing prices from respective listing currencies (UAH, PLN, GBP) into U.S. dollars based on F/X rates at the time of exchange closing. In order to limit the impact of a particular stock on the index, we capped the maximum weighting at 15%, a widely accepted threshold. Weightings and index composition are revised every three months, on June 1, Sep. 1, Dec. 1 and Mar 1. The value for any given day equals the index’s total free float capitalization divided by the capitalization on May 5, 1997, multiplied by 1,000 and an adjusting coefficient.