FDX Methodology: GD-D40, iG-D40, iG15-D40 and GD15-D40 Indexes

Goals and Objectives of the Development

Development Objective: Create a methodology for calculating financial indices to support iGaming and GameDev indices by Data40.

Development Tasks:

1. To write a description of the indexes GD-D40, iG-D40, iG15-D40, GD15-D40;
2. To write the mathematical methodology for calculating indices GD-D40, iG-D40,
   iG15-D40, GD15-D40;
3. To compose a description of the formation of the Index Calculation Base and the frequency of their revision;
4. To list the corporate events that cause changes in the market value of indices.

Disclaimers

The methodology is based on research on financial indices conducted by the Data40 team.

Document Markup

Conclusions

FDX General Information

The price indices GD-D40, iG-D40, iG15-D40, and GD15-D40 measure the weighted average prices of assets included in the index and reflect changes in prices within the asset group over a specific period of time. The Data40 price indices belong to the asset class of stocks and are weighted by the stock prices of the companies included in the index.

Mathematical Methodology Index Calculation

The indices are calculated as the arithmetic mean value of the stocks included in the index at the time of calculation, according to the following formula:

Algorithm for Forming the Index Calculation Base

1. The number of companies in the GD-D40, iG-D40, iG15-D40, GD15-D40 indices is constant.
   • GD-D40 – includes the top 40 Game Development companies;
   • iG-D40 – includes the top 40 companies in the iGaming and Gambling industries;
   • iG15-D40 – includes the top 15 companies in the iGaming and Gambling industries from the iG-D40 index;
   • GD15-D40 – includes the top 15 Game Development companies from the GD-D40 index.

2. Based on subjective (expert) assessment, a list of companies is formed. Using the specified criteria, the companies in the list are ranked, and the top 40 companies are included in the Index Calculation Base for GD-D40 and iG-D40 indices. The criteria include:

   • The market capitalization of companies;
   • Revenue size of companies in the respective industry (Game Development and iGaming/Gambling).

   For the iG15-D40 index, the top 15 companies by market capitalization are selected from the iG-D40 index. For the GD15-D40 index, the top 15 companies by market capitalization are selected from the GD-D40 index, on the date corresponding to the revision date of the Index Calculation Base for the iG-D40 and GD-D40 indices.

3. Based on subjective (expert) assessment, Data40 may decide to include a company in the Index Calculation Base or exclude it from the Index Calculation Base, taking into account the requirements for the content of the Base.
4. Composition of companies in the Indexes Calculation Base on May 23, 2024:
   GD-D40
   GD15-D40
   iG-D40
   iG15-D40

The Order of Index Calculation Base Revision

• Inclusion and exclusion of companies from the Index Calculation Base are carried out during the revision of the Base;
• Index Calculation Base revisions occur no more than once a year. Revised Calculation Bases come into effect on the Monday of the last working week of April. Data40 may establish different effective dates for revised Calculation Bases by decision;
• An extraordinary revision of the Calculation Base may be conducted in the event of the following occurrences:
  • Exclusion of company stocks from the list of securities admitted to trading on the exchange;
  • In the event of a reorganization or liquidation of a company included in the Calculation Base.

Influence of Corporate Events on Indices

The market value of the index changes when the stock prices on the exchange change. The market value of the index can change with the addition, removal, and replacement of companies in the Index, the revision of the Index Calculation Base, and the occurrence of corporate events in the companies included in the Index. The list of corporate events that can change the market value of the index includes:

• Adding\Removing\Replacing companies from the Index Calculation Base during M&A;
• Stock split\Reverse stock split;
• Special dividends – dividends paid by companies in addition to regular dividends, which they pay to shareholders. Special dividends are paid as an additional amount per share and can affect the company’s stock price;
• Rights offering – an event in which existing shareholders are given the right to purchase a certain number of additional shares of the company at a specified price (exercise price or subscription price) within a specified period (subscription period).