The Dubai Financial Market (DFM) has launched a new general index which provides market participants with investable and tradeable benchmarks for the equity market.
S&P Dow Jones Indices acts as the calculation agent of the indices and the new general index provides enhancements for investors, including 10% threshold caps, quarterly rebalancing, independent methodology oversight and index calculation based on actual free float.
The transformation also includes eight sectoral indices as well as the DFM Sharia Index. The launch follows a consultation with market participants.
Key features of the new methodology of DFM indices include capping the threshold of a DFM index individual constituent at 10% of the index weightage instead of 20% currently, hence limiting the effect of limited number of companies on the index.
Quarterly rebalancing of the index also replaces the current semi-annual review.
Also added are new sectors tracked by institutional clients, including communication services, consumer staples, materials, real estate, utilities, financials, industrials and consumer discretionary.
(Reporting by Imogen Lillywhite; editing by Cleofe Maceda)