Standard & Poor’s, the global index provider, has launched a new index which will provide investors with an exposure to forty large Gulf-based listed companies.
The S&P GCC 40 Index will provide investors with exposure to 40 of the largest and most liquid companies on the primary exchanges of Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.
On a historical basis, the S&P GCC 40 Index recorded returns of 10.8% year-to-date, and 39.2% annualised on a three-year basis.
The index is comprised of companies from the financial, materials, telecoms and industrials sectors, with Industries Qatar, Emaar Properties and Kuwait-based Mobile Telecommunications Company among the largest constituents.
With 35% and 12 companies the United Arab Emirates has the largest country weighting, followed by Kuwait with 30% via 12 companies and Qatar with 29%, via 11 companies.
To provide broad exposure across GCC countries, the index limits the number of companies from any single country to 12, and requires that every country be represented in the index.
Alka Banerjee, vice president of Standard & Poor’s Index Services, said: “The new index has been designed in response to investor demand for access to the largest and most liquid stocks in the region’s equity markets. It is different to existing GCC indices which are more focused on providing benchmark performance data. With a pool of large and easily accessible underlying stocks, the S&P GCC 40 Index will provide a unique way for international investors to take part in the Gulf’s growth story.”
To be eligible for inclusion in the S&P GCC 40 Index, constituents must have a minimum float-adjusted market capitalisation of $400m, a three-month average daily value traded of at least $1m, and be domiciled in Bahrain, Kuwait, Oman, Qatar, or the United Arab Emirates.
The index will be rebalanced twice a year in January and July.