FTSE mulls Gulf stock index
London, July 30, 2008
Index compiler FTSE expects to create a regional index for the Gulf by the end of the year, helping broad international investment in the region's stock markets, a senior manager said.
FTSE Group's managing director for Europe, the Middle East and Africa Imogen Dillon-Hatcher said the index would meet growing demand for access to the Gulf by international investors. Creating such an index is not easy, however, due to the size and differences of the region.
"You have a very disparate landmass, with different days of market openings, different hours of operation (and) you have umpteen different currencies," she said.
Dillon-Hatcher said rules on investment also varied greatly across the region. In Saudi Arabia, for example, there are different rules for Saudi, other Arab and international investors.
Creating an overall Gulf index has therefore taken some time. In the meantime FTSE, a leading investment benchmarker, has been tapping into the region with country indexes created with local players.
The promoters say that the fund allows investors to diversify their overall global portfolios, tapping into Kuwait's oil-based economy while focusing on non-oil related stocks.
FTSE's Kuwait index comprises 31 per cent banking stocks, 21 per cent telecoms, 17 per cent investment companies and only 4 per cent petroleum and chemicals.
FTSE's other GCC ventures include the FTSE DIFX UAE 20, which is an index compiled with the Dubai Stock Exchange.
Dillon-Hatcher said her firm would soon launch other indexes in the region and also had plans in the rest of the Middle East and North Africa.