The PFTS index committee approved changes to the PFTS index basket, effective October 15, and methodology of index calculation, effective October 13. Kryukiv Wagon (KVBZ: BUY) and Alchevsk Iron & Steel (ALMK: BUY) were added to the PFTS basket, while Donbasenergo (DOEN: BUY) and Luhanskteplovoz (LTPL: U/R) were withdrawn. The PFTS also temporarily excluded Poltava Iron Ore (PGOK: HOLD) pending State Securities and Exchange Commission approval of the company’s additional share issue of September 23. The index committee ruled that the share of an individual stock in the basket’s total capitalization would not exceed 15%. The PFTS said that on October 10 it approved new methodology for the calculation of the PFTS index: it will be calculated in real time (presumably, starting in November); the index will be calculated using the weighted average price of the latest three transactions in a stock. Olexander Klymchuk: We view the changes as steps in the right direction since (1) more liquid Kryukiv Wagon was included instead of illiquid Luhanskteplovoz and (2) with the exclusion of Donbasenergo, the basket becomes less skewed toward Utilities. Despite the positive change, the sector’s share in the basket reduces from 43% to ~35%, still higher than the 15% of total free float Utilities account for on the Ukrainian stock market. The PFTS basket still does not include any real estate or consumer/retail stocks. Concorde Capital’s UA CIU index, which we introduced in August, more closely mirrors the real situation on the market: utilities make up 14.5% of the basket, while real estate and consumer/retail hold 19.5%.