Dow Jones Indexes, a leading global index provider, has issued the results of the regular annual review of the Dow Jones SAFE Indexes. According to an announcement made by the SAFE Secretariat here on Wednesday, the Dow Jones-SAFE 100 index was launched last year under an ambitious initiative of the South Asian Federation of Exchanges, which aimed to showcase the collective performance of selected South Asian markets.
The purpose of the initiative was to represent the region as one asset class for the international investors. The changes to the composition of the Dow Jones SAFE 100 Index and its sub-index, the Dow Jones SAFE Pakistan Index, will be effective after the close of trading on Friday, March 19, 2010.
As a result of the annual review, a total of 15 companies (nine Pakistani companies and six companies from India) would stand deleted and, in their place, 15 new companies would be included in the revised and updated index. In the updated index, six Indian companies, four Bangladeshi companies, three Sri Lanka companies and two Pakistani companies would be included.
The companies, which would be deleted from the Dow Jones SAFE 100 Index, are: ABB Ltd (India) (India, Industrial Goods & Services, 500002.BY); Ambuja Cements Ltd (India, Construction & Materials, 500425.BY); Arif Habib Securities Ltd (Pakistan, Financial Services, AHSL.KA); Bank Alfalah Ltd (Pakistan, Banks, BAFL.KA); Bank of India (India, Banks, 532149.BY); EFU General Insurance Co Ltd (Pakistan, Insurance, EFUG.KA); GlaxoSmithKline Pakistan Ltd (Pakistan, Health Care, GLAXO.KA); Idea Cellular Ltd (India, Telecommunications, 532822.BY); National Refinery Ltd (Pakistan, Oil & Gas, NRL.KA); Packages Ltd (Pakistan, Industrial Goods & Services, PKGS.KA); Reliance Capital Ltd (India, Insurance, 500111.BY); Shell Pakistan Ltd (Pakistan, Oil & Gas, SHEL.KA); Sui Northern Gas Pipelines Ltd (Pakistan, Utilities, SNGP.KA); Sui Southern Gas Co Ltd (Pakistan, Utilities, SSGC.KA); and Tata Communications Ltd (India, Telecommunications, 500483.BY). Nine Pakistani companies also will be removed from the Dow Jones SAFE Pakistan Index.
The 15 companies that are being added to the Dow Jones SAFE 100 Index are: Beximco Pharmaceuticals Ltd (Bangladesh, Health Care, BXP.LN); British American Tobacco Bangladesh Co Ltd (Bangladesh, Personal & Household Goods, BATBC.DH); Carsons Cumberbatch PLC (Sri Lanka, Financial Services, CARS.SL); Ceylon Tobacco Co Plc (Sri Lanka, Personal & Household Goods, CTC.SL); Commercial Bank of Ceylon Plc (Sri Lanka, Banks, COMB.SL); Dutch Bangla Bank Ltd (Bangladesh, Banks, DUTCHBANG.DH); Hindalco Industries Ltd (India, Basic Resources, 500440.BY); Mahindra & Mahindra Ltd (India, Industrial Goods & Services, 500520.BY); Nestle Pakistan Ltd (Pakistan, Food & Beverage, NESTLE.KA); NHPC Ltd (India, Utilities, 533098.BY); Pakistan Tobacco Co Ltd (Pakistan, Personal & Household Goods, PAKT.KA); Punjab National Bank (India, Banks, 532461.BY); Sesa Goa Ltd (India, Basic Resources, 500295.BY); Tata Motors Ltd (India, Industrial Goods & Services, 500570.BY); and Titas Gas Transmission & Distribution Co Ltd (Bangladesh, Utilities, TITASGAS.DH).
Two Pakistani companies also will be added to the Dow Jones SAFE Pakistan Index: The Dow Jones SAFE 100 Index measures the performance of 100 blue chip companies in five of the eight member states of the South Asian Federation of Exchanges (SAFE). The five member states included in the index are India, Bangladesh, Mauritius, Pakistan and Sri Lanka.
Its sub-index, the Dow Jones SAFE Pakistan Index, measures the performance of the Pakistani stocks in the Dow Jones SAFE 100 Index. The Dow Jones SAFE 100 index covers approximately 95 percent of the underlying market capitalisation. The selection list of Dow Jones SAFE 100 index comprises top 100 India companies and the top 100 ex-India companies, which is compiled on quarterly basis.
The selection list suggests possible additions or deletions at the next composition review and the index rebalancing is conducted annually on the Monday following the third Friday in March. In order to compile the index, stocks are selected separately for India companies and ex-India companies, based on their rankings by full market capitalisation.
For India companies, stocks are selected top-down by full market capitalisation rank under the target component number of 50 is reached for the Indian companies. The rest of the 50 companies are selected on ex-India basis. The Dow Jones SAFE 100 index is weighted by float adjusted market capitalisation. The weight of each represented country is capped at 50 percent, and the weight of each individual component is capped at 10 percent. In the recomposed index, Reliance Industries Ltd of India carries the maximum weightage, followed by MCB Bank Limited of Pakistan--signifying the two top most valuable companies of the region.
Dow Jones SAFE 100 index was launched in Abu Dhabi, UAE, on March 11, 2009 and initially comprised of 33 Pakistani companies. However, after the annual review; the number of companies from Pakistan would be reduced to 26, thereby showing a net reduction of seven companies from the newly re-composed Index. Further information on the Dow Jones SAFE Indexes can be found at http://www.djindexes.com.
The SAFE is an initiative towards regional and global integration of the domestic capital markets. It's a Saarc recognised non-profit association and an affiliate of the World Federation of Exchanges with an objective to promote the growth of securities market in the region.
A fusion of 25 members from 8 South Asian countries, Mauritius and UAE, SAFE is an emblem of South Asian Exchanges to the rest of the world, in a broader sphere to promote South Asia as the next most preferred investment destination for the world. The permanent Secretariat of SAFE is located in Islamabad, Pakistan. The Secretariat activities are being handled and managed by Aftab Ahmad Chaudhry, Secretary General, SAFE and Ms Farzin Khan, Deputy Secretary General, SAFE Secretariat added.
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