Global index provider Standard & Poor's has launched a new index for some of the biggest-name stocks in developing equity markets.

The London-based firm described the newly launched S&P/IFCG Extended Frontier 150 Index as "the first fully investable index for frontier equity markets".

It said the new index would contain the largest and most liquid stocks from more than 30 developing markets in Asia, Eastern Europe, the Balkans, the Baltics, Africa, Middle East, Latin America and the Caribbean.

S&P said the index would offer exposure to markets previously not considered investable by most fund managers because they are dominated by companies once thought too small to trade.

Bahrain is one of a number of emerging countries which will have firms featured on the new index, after S&P said it believed such markets now have adequate listings and turnover and have attracted sufficient foreign investor interest to warrant the infrastructure necessary to sustain regular index calculations.

A spokesman for the firm told Gulf Daily News it was not able to disclose the identity of the two Bahraini firms that would feature on the index.

S&P vice-president of index services Alka Banerjee said the S&P/IFCG Extended Frontier 150 was designed to meet the needs of increasingly sophisticated investors seeking to expand into markets with the potential for similar or greater returns than other better known developed and emerging markets.

"Frontier markets represent the next chapter for alpha-seeking investors looking beyond the maturing developing economies," he said.

"Accelerating economic growth, increased government focus on privatisations and heightened IPO activity is luring foreign investors to frontier equity markets.

"These markets are less exposed to swings in the global economy and less correlated with other equity markets, providing investors with distinct diversification and risk reduction benefits at a time when global equity markets are increasingly volatile."

The new index draws on data from the S&P Emerging Markets Database, and has been launched with constituents from 26 countries representing an adjusted market capitalisation of $193.3 billion.

Colombia, Kuwait, Nigeria, the UAE and Qatar have the highest country weightings in the new index, while Pakistan has the largest number of stocks included. Emaar Properties, Arab Bank, Mobile Telecommunication Company, Industries Qatar and Kuwait Finance House are among the Top 10 constituents.

To be eligible for inclusion in the index, companies must have a float-adjusted market capitalisation of at least $50 million and a value traded of at least $25m over the preceding six months.

The index uses a modified market capitalisation scheme to ensure that no country has a weight greater than 15pc and no security represents more than 10pc of the index.