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The FTSE/JSE Africa Index Series A Comprehensive Guide

BACKGROUND
The FTSE/JSE Africa Index Series is the result of an exciting joint venture between the JSE Securities Exchange South Africa (JSE) and the FTSE Group (FTSE). The Series brings with it a change in the philosophy and methodology for calculating indices and classifying sectors. It forms a strong foundation for JSEs vision to be recognized for providing world class primary markets, secondary markets and

services facilitated by strategic affiliations while providing a Gateway integrating Southern Africa into global financial markets.

NATURE OF THE DEAL


The FTSE/JSE Africa Index Series has a number of advanced design features, the most topical being the move from indices based on full market capitalization to free float adjusted indices. FTSE initially implemented free float indices in June 2001 and is the market leader in this area. Since then, a number of international players have followed suite, including MSCI, DOW Jones and Stoxx. In addition to free float indices, the FTSE/JSE Africa Index Series reclassifies securities into sectors that embrace world standards by following the FTSE Global Classification System. In a nutshell, what this deal means for South Africa is that although the JSE still owns the index information and is responsible for its dissemination, the responsibility for calculating the indices and marketing them globally falls to FTSE. The JSE and FTSE work together in the development of new indices in response to market needs.

THE BENEFITS
The FTSE/JSE Africa Index Series holds numerous benefits for the JSE and its market. For instance, it: Allows the JSE to leverage FTSEs global reach; Ensures transparency through the index structure and ground rules; Gives a proper perspective on the investible share base by adjusting for free float; Achieves world-class index standards; Leverages leading technology; Provides live index calculations; Facilitates more frequent index value dissemination; Provides a familiar system for international players; and Enables the creation of new indices to meet the needs of the industry. This guide is designed to provide an overview of the FTSE/JSE Africa Index Series and how it works. The Ground Rules for the Management of the FTSE/JSE Africa Index Series provides a more detailed view of the process and should be consulted by those requiring more comprehensive information of the series. This document is available from the JSE or from the website www.ftsejse.co.za.

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The FTSE/JSE Africa Index Series A Comprehensive Guide


SECURITIES ELIGIBLE FOR THE FTSE/JSE AFRICA INDEX SERIES
The following securities are eligible for entry into the FTSE/JSE Africa Index Series: All sufficiently liquid ordinary shares in issue belonging to companies that have a listing on the JSE Securities Exchange South Africa; Where a single company has a number of different equity securities, all sufficiently liquid securities that have a full market value (before free float weightings are applied) of more than 25% of the companys main security; and Securities of companies whose business is that of holding equity and other investments (e.g. Investment Trusts) with some exceptions mentioned below. Securities which are not included in the FTSE/JSE Africa Index Series are those that do not fall into any of the above categories, as well as: Exchange Traded Funds (ETFs) and funds whose prices are a direct derivation of underlying holdings (e.g. Unit Trusts, Mutual Funds); Securities of companies classified as Pyramid companies; Investment funds that have been assessed by the FTSE Global Classification Committee as being ineligible, that is that they have been classified in Sector 89 (Investment Entities); and Securities falling in the Economic Group Specialist Securities (A0) (e.g. Kruger Rands). Shares belonging to companies that have a listing on the Namibian Stock Exchange (NSX) are included in the FTSE/JSE Africa Index Series and fall into the FTSE/JSE Africa Namibia Indices category.

RATING SHARES FOR LIQUIDITY


When rating a securitys overall liquidity, the following guidelines will be used: An accurate and reliable price must exist for the purposes of determining the market value of the company; and A security must turnover at least 0.5% of its shares in issue (after free float weightings are applied) per month in at least ten of the twelve months prior to being reviewed in order to be eligible for inclusion in the indices. Any period when a share is suspended will be excluded from this calculation. Liquidity reviews occur annually each December, this means that securities, which are not eligible on the basis of liquidity, will be excluded from the indices for a full year (until the next review in the following December). Note that there are no liquidity requirements for constituents of both the FTSE/JSE Africa Fledgling Index and the FTSE/JSE Africa Namibia Indices.

CALCULATING MARKET CAPITALISATION


Two types of market capitalization are calculated in the FTSE/JSE Africa Index Series:

Full Market Capitalization is calculated by taking the entire listed share issue of a security (including shares which are issued partly, or nil paid where the call dates are already determined and known) and multiplying this by the shares current price. Convertible preference shares and loan stocks are excluded from this calculation until such time as they are converted. It is important to note that the entire share issue

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The FTSE/JSE Africa Index Series A Comprehensive Guide


as described here is subject to a one percent rule which states that to prevent a large number of insignificant weighting changes, the number of shares in issue for each company is amended only when the total shares in issue changes by more than 1% on a cumulative basis.

market capitalization.

Free Float Market Capitalization is the adjusted market capitalization used to determine the weighting of securities in different indices and is calculated by applying the free float banding percentage to the full

FREE FLOAT: WHAT IT IS AND HOW ITS USED


Free float is the amount of shares freely available to investors. It excludes those shares where shareholding is restricted to specific individuals or groups of individuals. The use of free float weightings when calculating indices benefits investors by giving a more representative view of what is available in the market. Free float weightings allow investors to track an index more closely and invest accordingly. Shares that are considered to be restricted, and therefore not part of free float, include: Trade investments in an index constituent either by another constituent (i.e. cross-holdings) or nonconstituent company or entity; Significant long term holdings by founders, their families and/or directors; Employee share schemes; Government holdings; Foreign ownership limits; and Portfolio investments subject to a lock-in clause, for the duration of that clause. All other share holdings are not considered as restricted free float, including: Portfolio investments; Nominee holdings; and Holdings by investment companies. The quantity of free float shares is calculated for all companies eligible to be included in the FTSE/JSE Africa Index Series. Because the number of free float shares varies regularly and is often difficult to calculate exactly, FTSE and the JSE use a banding structure to apply the free float weighting. This banding structure works by rounding off the free float figure upwards, and serves the dual purpose of insulating the market from minor fluctuations in available free float and reflecting the change only when it has a significant impact on share availability. Free Free Free Free Free Free Free Free Float Calculation Result float greater than 5% but less than or equal to 15% float greater than 15% but less than or equal to 20% float greater than 20% but less than or equal to 30% float greater than 30% but less than or equal to 40% float greater than 40% but less than or equal to 50% float greater than 50% but less than or equal to 75% float greater than 75% Applied Free Float Band Next highest whole % 20% 30% 40% 50% 75% 100%

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Companies with a free float greater than 5% but less than or equal to 15% will be rounded up to the next highest whole number, but will only be eligible for the Index if the market capitalization of their available float is greater than the average companys free float capitalization within the Index.

SECTOR CLASSIFICATION OF SECURITIES


Securities are classified according to the FTSE Global Classification System first into economic groups and then into sectors and sub-sectors.

Listed Companies
Venture Capital
Economic Group 00

Main Board
Economic Group 10

Development Capital
Economic Group 20

Sector 11

Sector 13

Sub sector 131

Sub Sector 137

The FTSE Global Classification Committee performs this classification. The areas of the FTSE Global Classification System pertaining to the FTSE/JSE Africa Index Series are shown overleaf. For the purposes of the FTSE/JSE Africa Index Series, the Mining Sector (04) has been developed to include additional sub-sectors for Coal (042), Platinum (044) and Diamonds (046).

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The FTSE/JSE Africa Index Series A Comprehensive Guide


Economic Group
Mining (04) (J004)

Sector and Sub-Sector


Oil & Gas (07) (J007)
Oil Gas - Exploration & Production (073) Oil - Services (075) Oil - Integrated (078)

Resources (00) (J000)

Coal (042) (J151) Gold Mining (043) (J150) Platinum (044) (J153)

Mining Finance (045) (J155) Diamond (046) (J152) Other Mineral Extractors and Mines (048) (J154)

Chemicals (11) (J011)

Basic Industries (10) (J010)

Construction & Building Materials (13) (J013)


Builders Merchants (131) Building and Construction Materials (132) House Building (134) Other Construction (137)

Forestry & Paper (15) (J015)


Forestry (153) Paper (156)

Steel & Other Metals (18) (J018)


Non-Ferrous Metals (186) Steel (188)

Chemicals - Commoditiy (113) Chemicals - Advanced Materials (116) Chemicals - Speciality (118)

General Industrials (20) (J020)

Aerospace & Defence (21) (J021) Diversified Industrials (24) (J024) Electronic & Electrical Equipment (25) (J025)
Aerospace (215) Defence (216) Diversified industrials (240) Electrical Equipment (252) Electronic Equipment (253)

Engineering & Machinery (26) (J026)


Commercial Vehicles & Trucks (263) Engineering - Contractors (264) Engineering Fabricators (266) Engineering - General (267)

Cyclical Consumer Goods (30) (J030)

Automobiles & Parts (31) (J031)


Automobile (311) Auto Parts (313) Tyres & Rubber (317) Vehicle Distribution (318)

Household Goods & Textiles (34) (J034)


Clothing & Footwear (341) Furnishings & Floor Coverings (342) Household Appliances & Housewares (345) Leisure Equipment (347) Other Textiles & Leather Goods (349)

Beverages (41) (J041)

Food Producers & Processors (43) (J043)


Farming & Fishing (433) Food Processors (435)

Personal Care & Household Products (47) (J047)


Household Products (475) Personal Products (477)

Pharmaceuticals & Biotechnology (48) (J048)


Pharmaceuticals (480) Biotechnology (482)

Non Cyclical Consumer Goods (40) (J040)

Beverages - Brewers (415) Beverages - Distillers & Vintners (416) Soft Drinks (418)

Health (44) (J044)


Health Maintenance Organisations (443) Hospital Management & Long Term Care (444) Medical Equipment & Supplies (446) Other Health Care (449)

Tobacco (49) (J049)


Tobacco (490)

General Retailers (52) (J052)


Discount & Super Stores & Warehouses (524) Retailers eCommerce (525) Retailers - Hardlines (526) Retailers - Multi Department (527) Retailers - Soft Goods (528)

Leisure, Entertainment & Hotels (53) (J053)


Gaming (532) Home Entertainment (535) Hotels (536) Leisure Facilities (538) Restaurants & Pubs (539)

Support Services (58) (J058)


Business Support Services (581) Education, Business Training & Employment Agencies (583) Environmental Control (584) Funerals & Cemeteries (585) Laundries & Cleaners (586) Security & Alarm Services (588)

Transport (59) (J059)


Airlines & Airports (591) Rail, Road & Freight (596) Shipping & Ports (597)

Cyclical Services (50) (J050)

Media & Photography (54) (J054)


Broadcasting Contractors (542) Cable & Satellite (543) Media Agencies (545) Photography (546) Publishing & Printing (547)

Non Cyclical Services (60) (J060) Utilities (70) (J070)

Food & Drug Retailers (63) (J063)


Food & Drug Retailers (630)

Telecommunication Services (67) (J067)


Fixed-Line Telecommunication Services (673) Wireless Telecommunication Services (678)

Electricity (72) (J072)


Electricity (720)

Gas Distribution (73) (J073)


Gas Distribution (730) Water (780)

Water (78) (J078)

Banks (81) (J081)


Banks (810)

Life Assurance (84) (J084)


Life Assurance (840)

Real Estate (86) (J086)


Real Estate Holding & Development (862) Property Agencies (864)

Investment Entities (Ineligible) (89) (n/a)


Investment Entities Ineligible for Inclusion in FTSE (890)

Financials (80) (J080)

Insurance (83) (J083)


Insurance Brokers (833) Insurance Non-life (834) Re-Insurance (837) Other Insurance (839)

Investment Companies (85) (J085)


Investment Companies (850)

Speciality & Other Finance (87) (J087)


Asset Managers (871) Consumer Finance (873) Investment Banks (875) Mortgage Finance (877) Other Financial (879)

Information Technology (90) (J090) Specialist Securities (A0) (n/a)

Information Technology Hardware (93) (J093)


Computer Hardware (932) Semiconductors (936) Telecommunications Equipment (938)

Software & Computer Services (97) (J097)


Computer Services (972) Internet (974) Software (977)

Kruger Rands (A1) (n/a)


Kruger Rands (A11)

Preference Shares (A3) (n/a)


Preference Shares (A31)

Warrants (A5) (n/a)


Warrants (A51)

Exchange Traded Funds (A7) (n/a)


Exchange Traded Funds (A71)

Corporate Debt (A2) (n/a)


Corporate Debt (A21)

Unit Trust (A4) (n/a)


Unit Trust (A41)

Investment Products (A6) (n/a)


Investment Products (A61)

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The FTSE/JSE Africa Index Series A Comprehensive Guide


THE INDICES OF THE FTSE/JSE AFRICA INDEX SERIES
The FTSE/JSE Africa Index Series may be roughly grouped into five categories; FTSE/JSE Africa Headline indices, FTSE/JSE Africa Tradable indices, FTSE/JSE Africa Sector indices, FTSE/JSE Africa Secondary Market indices and FTSE/JSE Africa Specialist indices. In addition, indices are calculated for the Namibian Stock Exchange (NSX). These indices are divided into similar, but fewer, categories in correlation to the size of the market.

FTSE/JSE Africa Headline Indices


All eligible listed companies are included in at least one of the FTSE/JSE Africa Headline Indices. The eligible companies are ranked by full market capitalization (before free float weightings are applied). The top 99% of all companies are included in the FTSE/JSE Africa All Share Index with the remaining 1% forming the FTSE/JSE Africa Fledgling Index. The FTSE/JSE Africa All Share Index is further divided into the FTSE/JSE Africa Top 40 Index containing the forty highest-ranking companies, the FTSE/JSE Africa Mid Cap Index containing the sixty highest-ranking companies outside of the FTSE/JSE Africa Top 40 (i.e. companies ranked 41-100), and the FTSE/JSE Africa Small Cap Index containing the remaining companies. The structure of the FTSE/JSE Africa Headline Indices is summarized below:

Determining the FTSE/JSE Africa Headline Indices Constituents


Apply liquidity screen to determine eligibility Rank all companies by full market capitalization Of the top 99%, separate into Top Cap, Mid Cap and Small Cap Apply Free Float Weighting

Reserve lists are kept of the five highest-ranking non-constituents of the FTSE/JSE Africa Top 40 Index and the ten highest-ranking non-constituents of the FTSE/JSE Africa Mid Cap Index. The appropriate reserve list is used in the event that one or more constituents is deleted from the either of these indices. The FTSE/JSE Africa Headline Indices are as follows:
Index Code J200 Alpha Code TOPI Index Name Top 40 Disseminated 15 seconds Description The top forty companies which are constituents of the FTSE/JSE Africa All Share Index ranked by full market capitalization (before free float weightings are applied) The top 99% of eligible listed companies ranked by full market capitalization (before free float weightings are applied) The sixty companies which are constituents of the FTSE/JSE Africa All Share Index ranked 41100 by full market capitalization (before free float weightings are applied) The companies included in the FTSE/JSE Africa All Share Index but not included in the FTSE/JSE Africa Top 40 or FTSE/JSE Africa Mid Cap Indices

J203 J201

ALSH MIDC

All Share Mid Cap

60 seconds 60 seconds

J202

SMLC

Small Cap

60 seconds

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The FTSE/JSE Africa Index Series A Comprehensive Guide


Index Code J204 Alpha Code FLED Index Name Fledgling Disseminated EOD Description The bottom 1% of eligible listed companies ranked by full market capitalization (before free float weightings are applied)

* EOD End of Day

FTSE/JSE Africa Tradable Indices


There are six tradable indices in the FTSE/JSE Africa Index Series: Index Code J200 Alpha Code TOPI Index Name Top 40 Disseminated 15 seconds Description The top forty companies which are constituents of the FTSE/JSE Africa All Share Index ranked by full market capitalization (before free float weightings are applied) All companies which are constituents of both the FTSE/JSE Africa All Share Index and the gold mining sub-sector The top twenty companies which are constituents of the resources economic group ranked by full market capitalization (before free float weightings are applied) The top twenty-five companies which are constituents of either the basic industrial or general industrial economic groups ranked by full market capitalization (before free float weightings are applied) The top fifteen companies which are constituents of the financial economic group ranked by full market capitalization (before free float weightings are applied) The top thirty companies which are constituents of either the financial, basic industrial or general industrial economic groups ranked by full market capitalization (before free float weightings are applied)

J150 J210

GLDX RESI

Gold Mining Resource 20

15 seconds 15 seconds

J211

INDI

Industrial 25

15 seconds

J212

FINI

Financial 15

15 seconds

J213

FNDI

Financial and Industrial 30

15 seconds

FTSE/JSE Africa Sector Indices


The Sector Indices can be divided into Economic Group Indices, Sector Indices and Sub-Sector Indices. Inclusion in these indices is based on the liquidity of the security and on the sector classification of the listed company according to the FTSE Global Classification System as applied at the JSE. All Sector Indices are disseminated every 60 seconds.

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Index Code J000 J010 J020 J030 J040 J050 J060 J070 J080 J090 Alpha Code RESO BIND GIND CCGD NCCG CSEV NCSV UTIL FIN ITCH Index Name

Economic Group Indices


Resources Basic Industries General Industries Cyclical Consumer Goods Non Cyclical Consumer Goods Cyclical Services Non Cyclical Services Utilities Financials Information Technology Mining Oil & Gas Chemicals Construction & Building Materials Forestry & Paper Steel & Other Metals Aerospace & Defence Diversified Industrials Electronic & Electrical Equipment Engineering & Machinery Automobiles & Parts Household Goods & Textiles Beverages Food Producers & Processors Health Personal Care & Household Products Pharmaceuticals and Biotechnology Tobacco General Retailers Leisure, Entertainment & Hotels Media & Photography Support Services Transport Food & Drug Retailers 60 60 60 60 seconds seconds seconds seconds

60 seconds 60 60 60 60 60 seconds seconds seconds seconds seconds

All companies which are constituents of both the FTSE/JSE Africa All Share Index and the economic group after which the index is named. Where no eligible companies exist in an economic group no index value will be disseminated.

Sector Indices
J004 J007 J011 J013 J015 J018 J021 J024 J025 J026 J031 J034 J041 J043 J044 J047 J048 J049 J052 J053 J054 J058 J059 J063 MNNG OLGS CHEM CBDM FRPP STMT AEDF DIND EEEQ EGMC AUTO HGTX BEVE FPPS HLTH PCHP PBIO TBCO GENR LEHT MDPT SSEV TRNS FDRT 60 60 60 60 60 60 60 60 60 seconds seconds seconds seconds seconds seconds seconds seconds seconds All companies which are constituents of both the FTSE/JSE Africa All Share Index and the sector after which the index is named. Where no eligible companies exist in a sector no index value will be disseminated.

60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 60 60 60 seconds seconds seconds seconds

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J067 J072 J073 J078 J081 J083 J084 J085 J086 J087 J093 J097 TLSV ELEC GASD WATR BNKS INSR LFEA INVC RLST SPOF ITHD SCSV Telecommunication Services Electricity Gas Distribution Water Banks Insurance Life Assurance Investment Companies Real Estate Speciality & Other Finance Information Technology Hardware Software & Computer Services Gold Mining Coal Mining Diamond Mining Platinum Mining Other Mineral Extractors & Mines Mining Finance 60 seconds 60 60 60 60 60 60 60 60 60 seconds seconds seconds seconds seconds seconds seconds seconds seconds

60 seconds 60 seconds

All companies which are constituents of both the FTSE/JSE Africa All Share Index and the sector after which the index is named. Where no eligible companies exist in a sector no index value will be disseminated.

Sub-Sector Indices
J150 J151 J152 J153 J154 J155 GLDX COAL DIAM PLAT METL MINF 15 60 60 60 60 seconds seconds seconds seconds seconds All companies which are constituents of both the FTSE/JSE Africa All Share Index and the sub-sector after which the index is named. Where no eligible companies exist in a subsector no index value will be disseminated.

60 seconds

FTSE/JSE Africa Secondary Market Indices


Two indices form the FTSE/JSE Africa Secondary Market Indices: Index Code J230 J231 Alpha Code DEVC VENC Index Name Development Capital Venture Capital Disseminated EOD EOD Description Small to medium size companies with limited profit history requiring start-up investment capital. Companies specializing in the holding of portfolio investments in venture capital projects and/or single venture companies.

*EOD End of Day

FTSE/JSE Africa Specialist Indices


The FTSE/JSE Africa Specialist Indices allow for the creation of indices based on criteria independent of market capitalization and classification. These criteria may include both business and socio-economic factors. A number of specialist indices are currently available as part of the FTSE/JSE Africa Index Series and several others are under development.

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Index Code J250 J255 J256

Alpha Code ALEX PUTS PULS

Index Name Financial and Industrial Property Unit Trust Property Loan Stock

Disseminated 60 seconds 60 seconds 60 seconds

Description All companies which are constituents of the FTSE/JSE Africa All Share Index excluding those classified in the resources economic group. Companies without share capital that have invested in the shares of property owning companies and in approved securities. Companies engaged primarily in the ownership of property or property owning companies and which have listed linked or unlinked debentures or loan stock. All companies which are constituents of both the FTSE/JSE Africa All Share Index and either the basic industrial or general industrial economic groups

J257

ASIN

Industrials

60 seconds

FTSE/JSE Africa Namibia Indices


The FTSE/JSE Africa Namibia Indices differ from all other indices in the series in that they are not subject to liquidity requirements and are not reviewed by the FTSE/JSE Advisory Committee. The day-to-day management and review of these indices is controlled by the NSX with new products collaboratively developed by both the JSE and the NSX. Index Code Alpha Code Index Name Disseminated Description

Namibia Headline Indices


N099 N098 LOCL OVRL Local Index Overall Index 60 seconds 60 seconds All companies which are primary listed on the Namibian Stock Exchange All companies listed on the Namibian Stock Exchange

Namibia Economic Group Indices


N000 N010 N020 N030 N040 N050 N060 N070 N080 N090 NRES NBND NGND NCCR NNCG NSEV NNCS NUTI NFIN NITC Resources Basic Industries General Industrials Cyclical Consumer Goods Non Cyclical Consumer Goods Cyclical Services Non Cyclical Services Utilities Financials Information Technology 60 60 60 60 seconds seconds seconds seconds

60 seconds 60 60 60 60 60 seconds seconds seconds seconds seconds

All companies listed on the Namibian Stock Exchange, which are also constituents of the economic group after which the index is named. Where no eligible companies exist in an economic group no index value will be disseminated.

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Index Code N004 N007 N011 N013 N015 N018 N021 N024 N025 N026 N031 N034 N041 N043 N044 N047 N048 N049 N052 N053 N054 N058 N059 N063 N067 N072 N073 N078 N081 N083 N084 N085 N086 N087 N093 Alpha Code NMNN NOLG NCHE NCBD NFRP NSTM NAED NDIN NEEQ NEGM NAUT NHGT NBEV NFPP NHLT NPCH NPBI NTBC NGEN NLEH NMDP NSSE NTRN NFDR NTLS NELE NGAS NWAT NBNK NINS NLFE NINV NRLS NSPO NITH Index Name Disseminated Description

Namibia Sector Indices


Mining Oil & Gas Chemicals Construction & Building Materials Forestry & Paper Steel & Other Metals Aerospace & Defence Diversified Industrials Electronic & Electrical Equipment Engineering & Machinery Automobiles and Parts Household Goods & Textiles Beverages Food Producers & Processors Health Personal Care & H/hold Prods Pharmaceuticals and Biotech Tobacco General Retailers Leisure, Entertainment & Hotels Media & Photography Support Services Transport Food & Drug Retailers Telecommunication Services Electricity Gas Distribution Water Banks Insurance Life Assurance Investment Companies Real Estate Speciality & Other Finance Information Technology Hardware 60 60 60 60 60 60 60 60 60 seconds seconds seconds seconds seconds seconds seconds seconds seconds All companies listed on the Namibian Stock Exchange, which are also constituents of the sector after which the index is named. Where no eligible companies exist in a sector no index value will be disseminated.

60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 seconds 60 60 60 60 60 60 60 60 60 60 60 60 seconds seconds seconds seconds seconds seconds seconds seconds seconds seconds seconds seconds

All companies listed on the Namibian Stock Exchange, which are also constituents of the sector after which the index is named. Where no eligible companies exist in a sector no index value will be disseminated.

60 seconds 60 seconds 60 seconds

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Index Code N097 Alpha Code NSCS Index Name Software & Computer Services Disseminated 60 seconds Description

CALCULATING THE INDICES


All indices in the FTSE/JSE Africa Index Series are calculated between 09h00 and 17h00 on all days when the JSE is open for trading. All indices in the series are calculated using the formula: Index = Sum of Free Float Market Capitalization of All Constituent Companies Latest Index Divisor Where: the free float market capitalization of each company is calculated by multiplying the most recent share price by the number of shares after the free float weighting has been applied; and the Index Divisor is an arbitrary number chosen at the starting point of the index, which is adjusted when capitalization amendments are made to the constituents of the index

allowing the index value to remain comparable over time.


For a more detailed explanation of this and other calculations used when calculating indices refer to the Guide to Calculation Methods for the FTSE/JSE Africa Index Series available from the JSE, from FTSE, or from the website www.ftsejse.co.za.

DISPLAYING THE INDICES


Indices in the FTSE/JSE Africa Index Series are identified with an alphanumeric reference such as J010, J020 etc. through to J999. Each index is disseminated according to its specific requirements either, every 15 seconds, every minute or at the close of business for the day. All indices also display a current state:

Firm (Firm) - The index is calculated on trades generated by the JSE trading system, JSE SETS. This is the most common state and takes place during the hours of the Official Index Period. The Official Closing Index is the last index value calculated at the end of the firm period using the closing price from the JSE; Closed (Close) - The index has ceased calculation for the day; Held (Held) If, during official JSE market hours, an index has exceeded pre-set operating parameters and the calculation has been suspended pending resolution of the problem; or Indicative (Ind) - If there is a system problem or situation in the market that is judged to affect the quality of the constituent prices at any time when an index is being calculated, the index will be declared indicative.

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ADMINISTRATION OF THE INDICES
FTSE and the JSE are responsible for the day-to-day management of and operation of the indices. The FTSE/JSE Advisory Committee has been established to oversee the operation and management of the FTSE/JSE Africa Index Series. The purpose of the Committee is to: Ensure that global standards are contained in the ground rules which govern the indices; Oversee the ongoing management of the indices and the corporate actions that affect them; and Advise on the construction and methodology of new indices. No member of the Advisory Committee is on the Advisory Committee to represent that members employer but rather is there because of that persons specific expertise and to represent the interests of the industry generally.

REVIEW OF INDICES
The constituents of the FTSE/JSE Africa Index Series are reviewed quarterly, in March, June, September, and December in accordance with the FTSE/JSE Africa Index Series ground rules. Insertion and deletion of constituents of the indices is not restricted to the quarterly review and may be done at any time that a corporate event occurs which would impact the indices.

Rules for Insertion and Deletion of Securities


The rules for inserting and deleting companies at the quarterly review are designed to provide stability in the selection of constituents of the FTSE/JSE Africa Index Series while ensuring that the indices continue to be representative of the market by including or excluding those companies which have risen or fallen significantly. Some of the more common rules have been listed here, for a more comprehensive look at these rules please refer to the Ground Rules for the Management of the FTSE/JSE Africa Index Series available from FTSE, the JSE or on the official FTSE/JSE Africa Index Series website, www.ftsejse.co.za. To prevent a large number of insignificant weighting changes, the number of shares in issue for each company is amended only when the total shares in issue changes by more than 1% on a cumulative basis (commonly referred to as the one percent rule); A constituents free float will only be changed if its actual free float is more than 5 percentage points above the minimum or 5 percentage points below the maximum of an adjacent band. This 5percentage points threshold does not apply to the 15% limit; An existing constituent failing to trade at least 0.5% of its shares in issue per month for more than four of the twelve months will be deleted; A security will be included in the FTSE/JSE Africa Top 40 Index if it is ranked 35th or above when the eligible securities are ranked by full market capitalization; A security will be removed from the FTSE/JSE Africa Top 40 Index if it is ranked 46th or below when the eligible securities are ranked by full market capitalization; A security will be included in the FTSE/JSE Africa Mid Cap Index if it is ranked 85th or above when the eligible securities are ranked by full market capitalization; A security will be removed from the FTSE/JSE Africa Mid Cap Index if it is ranked 116th or below when the eligible securities are ranked by full market capitalization; A constant number of constituents will be maintained for the FTSE/JSE Africa Top 40 Index and the FTSE/JSE Africa Mid Cap Index with deleted constituents being replaced by the highest-ranking company on the reserve list;

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New issues where the full market capitalization of the security amounts to 1.0% or more of the full capitalization of the FTSE/JSE Africa All Share Index (before the application of individual constituent free float weightings) will be included as a constituent of the FTSE/JSE Africa Top 40 Companies Index after the close of business on the first day of official trading; Where a constituent is the subject of a merger, restructuring, complex take-over or split, the industry sector classification of the resulting constituent(s) will be determined by FTSE and the JSE and eligibility for all indices will be reviewed; Suspended constituents of the FTSE/JSE Africa Index Series will normally be deleted from the index between one and ten days after suspension depending on the circumstances around the suspension and the indices to which the security belongs. These securities will be considered for re-entry if relisted.

DISSEMINATION OF THE INDICES


The FTSE/JSE Africa Index Series is available in the following ways:

Live Intraday Data Indices are calculated real-time and disseminated every 15 seconds; Delayed Intraday Data Indices are calculated live and disseminated every 15 seconds to vendors End of Day Products A series of files sent out at the close of business each trading day
containing: who delay the onward dissemination to clients by 15 minutes;

Indices Products

Equities Products

Valuation: A file of all indices with data relating to these indices (e.g. closing value); Constituents: A file of all eligible instruments with relating data (e.g. indices to which it is a constituent, closing price, number of shares in issue (subject to the 1% rule)); Tracker: A file containing all changes to both indices and constituents that will be affected prior to the following business day. This file comprises three sections; Index Level Data, Stock Level Weighting Amendments and Stock Level Ex-Dividend Changes; and Equity information: A file containing information such as close price, high for the day and low for the day for all JSE instruments and products.

Users are able to subscribe separately to each of these products depending on their requirements. In addition to the standard dissemination of Indices, FTSE and the JSE also provide historic data of these indices for the period July 1995 to December 2001. As the FTSE/JSE Africa Index Series was not yet in existence during this period, the historic data has been recreated retrospectively for statistical purposes and may be purchased from the JSE New Business Data Services Department. Historic data for the period January 2002 to 21 June 2002 is available free of charge on the website www.ftsejse.co.za.

FUTURES CLOSEOUT
Along with the introduction of the FTSE/JSE Africa Index Series and the move to the new Equities Trading Systems, JSE SETS, the JSE introduced a new Futures Closeout procedure. Futures closeout occurs quarterly on the third Thursday of March, June, September and December. The closeout averaging process is as follows: The averaging period lasts for one hour and forty minutes beginning at 14h00 and ending at 15h40;

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The FTSE/JSE Africa Index Series A Comprehensive Guide


Price monitoring on the JSE SETS trading platform is suspended during the averaging period thus preventing the onset of volatility auctions; A price snapshot of each index constituent is taken on every minute (i.e. from 14h01 to 15h40). This snapshot is the last traded price reflected in automated trade on the JSE SETS trading platform; A total of 100 iterations of the constituents price are taken; The average price of each index constituent is calculated as follows: Settlement Price of Single Stock Future = The Sum of the Price Iterations Taken The Number of Iterations Taken (i.e. 100)

Average prices are only required for constituents of the FTSE/JSE Africa Tradable Indices. Futures on those individual shares that are not constituents of the FTSE/JSE Africa Tradable Indices are settled at the official JSE closing price; Index averages are based on their constituent instrument averages and are calculated as follows: Settlement Price of Index = The Sum of the Free Float Market Capitalization of Each Index Constituent Divisor of the Index Where the Free Float Market Capitalization is calculated as the average price of the constituent multiplied by the free float percentage; and the divisor of the index is an arbitrary number chosen at the starting point of the index, which is adjusted when capitalization amendments are made to the constituents of the index allowing the index value to remain comparable over time; The average prices of both instruments and indices are disseminated to the market by the JSEs Trading Department. Note that the FTSE/JSE Africa Index Series is not rebased on average prices, the indices continue to be calculated as normal during and after the futures closeout. The rebasing calculation is performed on the same day as the Futures Closeout but uses the closing price of the constituent instruments. The average instrument price also plays no role in the review of constituents of the index; this is based on the closing price of the instrument for the day.

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GENERAL CONTACT INFORMATION
The following documents provide more information on the FTSE/JSE Africa Index Series and are available from the JSE, from FTSE, or through the website www.ftsejse.co.za:

Ground Rules for the Management of the FTSE/JSE Africa Index Series Guide to Calculation Methods for the FTSE/JSE Africa Index Series FTSE/JSE Africa Index Series Master Code List FTSE/JSE Africa Index Series Product Specification FTSE/JSE Global Classification System
Further information on the FTSE/JSE Africa Index Series is available from the JSE or FTSE, who will also welcome comments on this Guide and on the Index Series. Enquiries should be addressed to:

JSE Securities Exchange South Africa


Indices Department One Exchange Square 2 Gwen Lane Sandown Sandton Tel: 27 (0) 11 520 7702 Fax: 27 (0) 11 520 8608 E-mail: indices@jse.co.za New Business Data Services Department One Exchange Square 2 Gwen Lane Sandown Sandton Tel: 27 (0) 11 520 7029 Fax: 27 (0) 11 520 8608 e-mail: indexdata@jse.co.za

FTSE Group
Client Services FTSE St Alphage House Podium Floor 2 Fore Street London EC2Y 5DA Tel: 44 (0) 20 7448 1810 Fax: 44 (0) 20 7448 1804 E-mail: info@ftse.com

Web site: www.ftsejse.co.za


FTSE International Limited (FTSE) and the JSE Securities Exchange South Africa (JSE) 2002. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior written permission of the JSE and FTSE. All information provided is for information purposes only. Every effort has been made to ensure that all information given is accurate, but no responsibility or liability can be accepted by the JSE or FTSE for errors or omissions or for any losses arising from the use of this information. "FTSE, "FT-SE" and "Footsie" are trade marks of the London Stock Exchange plc and The Financial Times Limited and are used by FTSE International Limited under license." The FTSE Global Classification System is compiled and operated by FTSE International Limited. All rights in and to the FTSE Global Classification System vest in FTSE.

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