Deal to create new MSCI index for Arab market

The National Investor (TNI), the UAE's largest investment banking and investment management firm by market value, has signed a licence agreement with MSCI Barra, a global benchmark authority, to create the MSCI Arabian Markets Real Estate Capped Index.

The index is a free float-adjusted, market capitalisation index, and contains more than 60 leading real estate securities of the largest and most liquid companies from 11 Arab countries, TNI said in a statement yesterday.

The index will be used as a benchmark for the existing TNI Mena Real Estate Active Fund (Mena Reaf). It will be calculated daily, and will include companies in the following sub-industries according to the Global Industrial Classification Standard: Construction & Engineering; Homebuilding; Hotels, Resorts & Cruise Lines; Thrifts & Mortgage Finance; and Diversified Real Estate Activities.

The index will be calculated in US dollar and weights of companies in the index will be capped at 10 per cent to reflect Mena Reaf investment guidelines, the statement said.

Walid Hayeck, Director Asset Management at TNI, commented: "The real estate sector is one of the first sectors to benefit from oil cash surpluses and government infrastructure spending. We like to think of it as a market proxy for regional growth and TNI Mena Reaf is an ideal tool for an exposure to this still promising growth story."