Emirates News Agency – Dubai Financial Market launches new general index in line with international best practices

Emirates News Agency – Dubai Financial Market launches new general index in line with international best practices
Emirates News Agency – Dubai Financial Market launches new general index in line with international best practices

Emirates News Agency – Dubai Financial Market launches new general index in line with international best practices

DUBAI, 21st November, 2018 (WAM) — The Dubai Financial Market today announced the launch of the new generic index for the market, the culmination of a comprehensive development process for its index methodology, aiming to provide all traders with global indices that are easy to trade and are to be invested according to them. The global company “S&P Dow Jones Indisys” has taken on the role of “Index Calculation Agent”.

Many improvements have been made to the methodology of the DFM indices, such as setting the maximum weight of all companies included in the index sample at 10%, rebalancing the index on a quarterly basis and having an independent expert committee monitor the index methodology and future changes the index is made to calculated on the basis of the market value of the shares actually available for trading. In addition to the Sharia Index, the new methodology was also applied to the eight sector indices.

Dubai Financial Market organized a special ceremony to ring the bell to mark this achievement, attended by Hamed Ali, CEO of Dubai Financial Market and Nasdaq Dubai, and Charbel Azzi, President of Asia Pacific, Middle East, and Africa , S&P Dow Jones Indisys, along with other prominent representatives from both sides.

The Dubai Financial Market had allowed all traders to give their opinion on the new methodology for its indicators before adopting its final version during a consultation period between October 3rd and 17th, 2022.

Hamed Ali said: “This important development step reflects Dubai Financial Market’s firm commitment to continuously improve its services as part of the strategic plan for the development of financial markets in Dubai and in line with the increasing demand from all categories of investors about the investment opportunities that it offers. By developing indices, we have been able to ensure that market indices methodology and classifications follow international best practices, allowing our growing base of local and international traders to benefit from transparent indices of the equity and futures markets in the Dubai financial market. We would like to thank S&P Dow Jones Indys for working with us to accomplish this step by providing the Index Calculation Agent service.

For his part, Charbel Azzi said: “We are delighted that Dubai Financial Market has chosen S&P Dow Jones Indices to provide the agent service for the calculation of its indices. Our goal is to provide unique and rules-based index solutions that meet the needs of local markets and help market participants achieve their investment goals.”

The main changes and additions to the DFM indices methodology are as follows:
Reducing the maximum weight of a company included in the index sample to just 10% instead of 20%, helping to limit the impact of a small number of companies on the index.
– Calculation of the index based on the market value of shares actually available for trading.
– Index rebalancing on a quarterly basis instead of the semi-annual review.
– An independent technical committee oversees the index methodology and future changes.
– Adoption of market sectors according to the Global Sector Classification Standard (GICS), followed by international investment institutions.
– The new methodology includes eight sector indicators, namely: the telecom sector, the consumer goods sector, the basic materials sector, the real estate sector, the public utilities sector, the financial sector, the industrial sector and the consumer services sector.

Dina Omar / Ramy Samih


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