KUWAIT, Sept 26 (KUNA) -- Arab Investment Co. (AIC) is making available sectoral "Beta Coefficient" for reclassified KSE sectors, as a service to stock market traders and investors and in particular to Kuwaiti companies, said AIC board chairwoman Najat al-Swaidi in a press conference held here on Wednesday.

On the 13th of May 2012, the Kuwait Stock Exchange changed the classification of shares from 7 sectors to 12 sectors, said the chairwoman, yet, no historical Sectoral data on the newly classified sectors was made available.

This has deprived Kuwait's financial industry from the necessary means to derive important quantitative analytical tools, chief among which is the beta coefficient which measures each sector's relative volatility, in other words, it measures the impact of overall change in the market on each sector, she said.

Accordingly, Beta coefficient is particularly important as a risk metric. It is also indispensible for valuing unquoted shares, and for calculating the applicable discount rate in financial feasibility studies depending on which sector the investment belongs to.

Therefore, the research division at Arab Investment Company has taken on the task of deriving the Beta coefficient of reclassified sectors, based on Total Monthly Performances-price, bonus shares and cash distributions, for the last five years.

Thomson-Reuters' database was drawn on to calculate month-on-month share prices and value of bonus shares. Corporate actions for the previous five years, were reviewed for each listed share, to acquire needed data on cash distributions.

Dr. Farid Lian, AIC Senior Vice President for Research and Business Development commented "perhaps the main achievement of AIC research team, has been the development of a fully automated system which, when activated, would autonomously update itself to capture developments in total performance constituents, detect and indicate the listing of new shares, and recalibrate itself accordingly, so as to return the updated Beta Coefficient for each of the market's twelve sectors at any point in time." By decision of AIC Management, the extracted Beta Coefficient will be made available on request to any financial or research entity in Kuwait or abroad.