LONDON, Oct. 22 /PRNewswire/ -- Standard & Poor's, the world's leading
index provider, announced today the launch of the S&P Select Frontier
Index, the first investable index covering a broad range of frontier equity
markets across Emerging Europe, Asia, South America and the Middle East.
The S&P Select Frontier Index is comprised of 30 of the largest and most
liquid companies from countries with smaller economies or less developed
capital markets than traditional emerging markets, and as a result, have
previously been excluded from most emerging market benchmarks and
investment funds.
Alka Banerjee, Vice President of Standard & Poor's Index Services, says
the S&P Select Frontier Index is designed to meet the needs of increasingly
sophisticated investors seeking to create index-linked products for
frontier markets, which have the potential for similar or greater returns
than other better known developed and emerging markets. The S&P Select
Frontier Index is a subset of the benchmark S&P Extended Frontier 150
Index.
"Liquidity has increased tremendously in frontier markets since 2001 as
restrictions on foreign investment have been relaxed and returns have
outpaced both developed and emerging markets over the last decade," Ms.
Banerjee says. "Less correlated to global economic cycles than their more
developed counterparts, the combination of accelerating economic growth,
increased government focus on privatisations and heightened IPO activity
provides an attractive investment environment for those seeking alpha and
diversification benefits."
The universe from which index candidates are drawn includes publicly
listed companies from 11 markets in the Standard & Poor's Emerging Market
Data Base (EMDB) that are generally accessible to foreign investors but are
excluded from the S&P/IFCI Emerging Markets Index.
At launch, the S&P Select Frontier Index includes companies from
Bulgaria, Cambodia, Colombia, Jordan, Kazakhstan, Pakistan, Panama, United
Arab Emirates and Vietnam. The biggest country weightings include Pakistan
(28.97%), UAE (23.12%), Jordan (13.23%), Vietnam (11.54%) and Panama
(7.74%), while the top three constituents are MCB Bank (Pakistan), Emaar
Properties (UAE) and Copa Holdings (Panama).
To be eligible for inclusion in the S&P Select Frontier index, a
company must have a minimum float-adjusted market capitalization of US$100
million, a minimum average daily value traded of US$2 million and a minimum
of 15 days traded over the previous six months. Constituent weights are
driven by liquidity and size.
Standard & Poor's also released today a white paper titled "Frontier
Markets: Investment Rationale, Accessibility and Risks". The paper also
includes information on the Standard & Poor's emerging and frontier market
indices, including methodology. It is available at:
http://www.standardandpoors.com/indices.
About Standard & Poor's Index Services
Standard & Poor's Index Services, the world's leading index provider,
maintains a wide variety of investable and benchmark indices to meet an
array of investor needs. Its family of indices includes the S&P 500, an
index with $1.3 trillion invested and $4.8 trillion benchmarked, and the
S&P Global 1200, a composite index comprised of seven regional and country
headline indices. For more information, please visit
http://www.standardandpoors.com/indices.
About Standard & Poor's
Standard & Poor's, a division of The McGraw-Hill Companies (NYSE: MHP),
is the world's foremost provider of financial market intelligence,
including independent credit ratings, indices, risk evaluation, investment
research and data. With approximately 8,500 employees, including wholly
owned affiliates, located in 21 countries, Standard & Poor's is an
essential part of the world's financial infrastructure and has played a
leading role for more than 140 years in providing investors with the
independent benchmarks they need to feel more confident about their
investment and financial decisions. For more information, visit
http://www.standardandpoors.com.
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