S&P Index to Track Persian Gulf Markets

July 1, 2008 (PLANSPONSOR.com) - Standard & Poor's has announced the launch of the S&P GCC 40 Index, which it says will provide tradable exposure to Gulf markets.

According to the announcement, the index tracks 40 of the largest and most liquid companies on the primary exchanges of Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates.   The S&P GCC 40 Index will be used by structured product and ETF providers to enable foreign investors gain exposure to the equity markets in the region.

The S&P GCC 40 Index is dominated by companies from the financial, materials, telecoms and industrials sectors, with Industries Qatar (Qatar), Emaar Properties (UAE) and Mobile Telecommunications Company (Kuwait) among the largest constituents. The United Arab Emirates has the largest country weighting (34.87%, 12 companies), followed by Kuwait (30.03%, 12 companies) and Qatar (29.21%, 11 companies). On a historical basis, the S&P GCC 40 Index recorded returns of 10.82% year-to-date, and 39.22% annualized on a three-year basis.

To be eligible for inclusion in the S&P GCC 40 Index, constituents must have:

  • a minimum float-adjusted market capitalization of US$400 million,
  • a three-month average daily value traded of at least US$1 million, and
  • be domiciled in Bahrain, Kuwait, Oman, Qatar, or the United Arab Emirates.

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. The index will be rebalanced twice a year in January and July.  

More information on the index is available at.