The first "roll," or introduction of a new series of names for the ABX.HE, is expected to proceed smoothly this week, according to industry sources. That could be due in part to the fact that - in contrast to synthetic indices of corporate names - when the ABX.HE 06-2 series is introduced this week, a wave of cash is not expected to slosh to it from the 06-1 series. While the new series will be more liquid than the previous series, total outstanding volume is not expected to go to zero for many years, UBS analysts said. The index will also not switch on Wednesday from its current 20-name format to include more names, as some market players had hoped.
"Rolling is not a very complicated thing for people to do, and the dealers have also made an effort to help prepare clients," said Ben Logan, a director within Markit Group's product development group, which serves as the index's administrator. In a transparency boosting effort, dealers will continue to quote prices for the first index on a daily basis, he said.