Dow Jones rolls out two Gulf indices

Dow Jones has launched two new indices for the Gulf equity markets.

The first is the Dow Jones GCC Index and includes 252 listed Gulf companies with a combined market capitalisation of $201 billion (Dh737bn), while the second, the Dow Jones Islamic Market GCC Index, covers 115 Shariah-compliant stocks totalling $52bn.

Companies from the UAE, Kuwait, Qatar, Bahrain and Oman feature in the fledgling indices, but Saudi Arabia is excluded because its stock market bars direct foreign investment.

The creation of the new indices is a reflection of the soaring international interest in the region's nascent stock exchanges. Only last month, the global benchmark MSCI announced it was looking to include the UAE, Kuwait and Qatar in its Emerging Markets Index.

"There is huge demand for our new indices from investors who want increased exposure to this region," said Rushdi Siddiqui, Dow Jones global director of Islamic indexes yesterday.

"Fund managers want to know how they did compared to an index and these new offerings provide a benchmark to measure performance against. They can use the two indices as the basis for new products. Record oil prices and the credit crisis have raised the profile of the Gulf."

While Dubai and Qatar battle it out to become the established financial hub of the region, Kuwait stocks dominate Dow Jones' new indices and account for 52 per cent of the index weighting, indicating that firms from the latter are more accessible to foreign investors.

For example, the top four stocks on the conventional index are all from Kuwait, with MTC the largest with a weighting of 6.7 per cent, followed by Kuwait Finance House, National Bank of Kuwait and National Industries Group.

Emaar is fifth and the top rated UAE company with a weighting of 3.04 per cent, followed by the DFM Company in sixth. Etisalat, the largest listed UAE company, is barred because it is closed to foreigners.

DP World, Aldar Properties, First Gulf Bank and National Bank of Abu Dhabi also make the top 20, while there are 30 UAE firms included overall, compared to Kuwait's 130. UAE firms contribute 22 per cent of overall index weighting, while Qatar is third with 15 per cent and Oman and Bahrain account for five per cent each.