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. Last Updated: 07/27/2016

Moscow Times Stock Index Revamped

Starting Thursday, the MT Index of 50 leading Russian stocks published daily in The Moscow Times will undergo fundamental changes, reflecting changes to market conditions.

A new three-tier methodology of pricing will be introduced to reflect the lack of liquidity of many stocks in the market.

In the first tier are high-liquidity stocks - those that traded on the Russian Trading System on five of the previous 30 days and have an aggregate volume of trade for that period of more than $1 million.

The price quoted for these stocks will be the last actual trade of the day. If no trade occurred that day, the last high bid on the RTS will be used.

The second tier covers stocks that do not meet the above criteria but for which at least one bid has been made on the RTS in the past month. The price will be the last high bid.

In the third tier are stocks for which no bid has been made in the past month. The stock will have a weighting of zero for the purpose of the MT Index. But the last bid price will be published as a matter of record in The Moscow Times.

The new methodology eliminates all quotations based on "offer" prices on the rationale that these may often be unrealistic. Now, only actual trades or firm bids will be used in pricing.

The changes were discussed at a meeting of the MT Index advisory board attended by representatives of Troika Dialog, United Financial Group, PriceWaterhouseCoopers, Milbank Tweed and Templeton.

The board also suggested that only bids made by RTS primary dealers should be used in pricing. It was argued that other bids were frequently suspect. It was not possible to implement this proposal because the board of RTS declined to make this information available for reasons of confidentiality.

The composition of the MT Index has also been changed.

Shares of Yuganskneftegaz, Tomskneft, Samaraneft and Nizhnevartovskneft have been removed from the index on the grounds that they lack liquidity or transparency.

Red Boiler (Krasny Kotelshchik), Uralmash-Zavody, TsUM and Khanty-MansiiskyTelekom will be included instead.