Amendments that enhance transparency for investors.. and rebalance the index on a quarterly basis

Dubai Financial launches a new general index in line with international best practices

Dubai Financial organized a special celebration in which the market opening bell rang.

From the source

Yesterday, the Dubai Financial Market announced the launch of the new general index for the market, as the culmination of a comprehensive development process for its index methodology, with the aim of providing dealers with global indices that are easy to trade and invest in according to them, pointing out that the global “S&P Dow Jones Indisys” company assumed the task of “calculating the index.” ».

Make improvements

The Dubai Financial Market revealed many improvements to the methodology of the “market” indices, which included, for example, rebalancing the index on a quarterly basis, and the supervision of an independent specialized committee on the methodology of the index and future amendments, and calculating the index on the basis of the market value of the actual shares available for free circulation. Pointing to the application of the new methodology also to the eight sectoral indicators, in addition to the "Sharia index".

The Dubai Financial Market allowed all dealers to express their opinion on the new methodology for its indicators, before adopting its final version during a consultation period that extended from 3 to 17 October 2022.

Continuous improvement

The Dubai Financial Market organized a special ceremony to ring the bell on the occasion of the launch of the new index.

Hamed Ali, CEO of the Dubai Financial Market and Nasdaq Dubai, said that this important development step reflects the firm commitment of the Dubai Financial Market to continuous improvement of its services within the framework of the strategic plan for the development of financial markets in Dubai, and in keeping with the growing demand from all categories of investors regarding investment opportunities. that it provides.

He added, “Through the development of the indices, we were able to ensure that the methodology and classifications of market indices are in line with international best practices, so that our growing base of local and international dealers will benefit from transparent indices for the stock and futures markets in the Dubai Financial Market.” He thanked S&P Dow Jones Indices. For its cooperation in accomplishing this step by providing the “Index Calculation Agent” service.

For his part, Charbel Azzi, President of the Asia-Pacific Region, Middle East and Africa at S&P Dow Jones Indysys, said: “We seek to provide distinguished and rule-based index solutions that meet the requirements of local markets and help market participants achieve their investment goals.” .

 Amendments and additions to the Dubai Financial Market indices methodology

Reducing the maximum weight of any company included in the index sample to only 10% instead of 20%, which contributes to

In reducing the impact of a small number of companies on the index.

Calculating the index based on the market value of actual shares available for free trading.

Rebalancing the index on a quarterly basis, instead of the semi-annual review.

An independent specialized committee oversees the index methodology and future amendments.

Adoption of market sectors according to the Global Sector Classification Standard (GICS) followed by international investment institutions.

The new methodology includes eight sectoral indicators: communications, consumer goods, and materials

Basic, real estate, utilities, industry, consumer services, and the financial sector.

Follow our latest local and sports news and the latest political and economic developments via Google news