DUBAI - Dubai Financial Market (DFM) said on Monday it planned to adopt a new methodology for its main equities indices, which will come into effect in the fourth quarter.
The Dubai bourse's general index, Sharia index and sector indices, will be calculated by S&P Dow Jones Indices, it said in a statement.
A key improvement among the changes is a limit on the weighting of a listed company to 10% from 20%, which should result in a larger representation of companies on the DFM's benchmarks, it said.
The Dubai bourse said the index calculation will be based on actual free float adjusted market capitalisation, and that the indices will be rebalanced on a quarterly basis, from semi-annually currently.
The bourse plans to align its sectors with an industry classification standard which is followed by institutional clients, it said.
DFM will have seven sectors: financials, industrials, real estate, utilities, communication services, materials and consumer staples.
The bourse has invited market participants for consultations on the index methodology ahead of possible changes, with the revised indexes to be launched in Q4, it said.
The changes follow a flurry of initial public offerings from state-linked entities this year, part of a government programme intended to attract investors and boost activity on the stock exchange.
Toll-road operator Salik , which listed last week, raised 3.735 billion dirhams ($1.02 billion) by selling a 24.9% stake in its initial public offering (IPO), giving the company a market value of 15 billion dirhams.
Dubai business park operator TECOM Group in June raised 1.7 billion dirhams ($463 million) through the sale of 625 million ordinary shares, equivalent to 12.5% of the company in an IPO.
Dubai's Water and Electricity Authority, known as DEWA, in April raised over $6 billion for its IPO, the region's biggest since Saudi Aramco.
(Reporting by Hadeel Al Sayegh, editing by Ed Osmond)