The Warsaw Stock Exchange is to start to calculate and publish three dividend indices – WIG20dvp, mWIG40dvp, and sWIG80dvp, from 27 December 2018 – which will track aggregate dividends paid by the stocks participating in the underlying index (WIG20, mWIG40, sWIG80, respectively) in the calendar year.
“We are starting to publish the new indices because they are a great source of information about dividends paid in our market. Such information is particularly relevant for investors who are looking for attractive and stable returns. GPW lists many companies which regularly pay dividends in excess of interest paid by debt instruments. They include large caps participating in WIG20 as well as medium-sized and small companies participating in mWIG40 and sWIG80, respectively,” says Marek Dietl, President of GPW.
Dividend indices are also an important source of information for investors trading in index derivatives (futures and options) whose valuation must include dividends. In the future, GPW in planning to offer trade in dividend index futures which allow investors to hedge against the dividend risk of derivatives.
The dividend yield of WIG20 is 1.9 per cent pa and the dividend yield of mWIG40 and sWIG80 is 3.1 per cent and 4.7 per cent, respectively.
The new indices will not aggregate dividends paid in previous years and they will be reset at the end of each year. Every year, the indices start at 0 (no dividend paid) and start to aggregate dividend from scratch. The index value at the year’s end will represent the sum of dividends paid by the stocks participating in the underlying index throughout the year.
The indices will be reset at the first trading session after the third Friday in December. This year, the session falls on 27 December, which is the first day of publication of the new indices.
The indices will only include ordinary cash dividends, including advance dividends. The indices will be recalculated to include paid dividends at the trading session when shares are first traded without dividend.
The indices will be published in the single-price system at 11:00. The dividend indices will be calculated back to 2 January 2007.