Dow Jones Indexes creates stock indexes linked to Gulf Cooperation Council region

By Devika Patel

Knoxville, Tenn., July 1 - Dow Jones Indexes has formed new indexes that measure the performance of conventional and Shari'ah-compliant stocks of five of the Gulf Cooperation Council member states: Bahrain, Kuwait, Oman, Qatar and United Arab Emirates, according to a press release.

The Dow Jones GCC and the Dow Jones Islamic Market GCC indexes represent approximately 95% of the float-adjusted market capitalization of the five countries.

The five countries included in the index represent the investible universe of the GCC region and will be the first in a series of conventional and Shari'ah-compliant GCC indexes.

The Dow Jones GCC and Dow Jones Islamic Market GCC indexes are weighted by float-adjusted market capitalization.

The weights of individual stocks are capped at 15% in each country in both indexes - and at 30% for Bahrain in the Dow Jones Islamic Market GCC index - in order to prevent the index from being dominated by certain securities.

As of June 15, the top 10 components for the Dow Jones GCC index by free-float market capitalization are Mobile Telecommunications Co., Kuwait; Kuwait Finance House, Kuwait; National Bank of Kuwait, Kuwait; National Industries Group, Kuwait; Emaar Properties, United Arab Emirates; Dubai Financial Market, United Arab Emirates; Industries of Qatar, Qatar; Qatar National Bank, Qatar; DP World, United Arab Emirates; and Public Warehousing Co., Kuwait.

The top 10 components for the Dow Jones Islamic Market GCC index by float-adjusted market capitalization are Public Warehousing, Kuwait; Mobile Telecommunications, Kuwait; Investment Dar, Kuwait; Gulf Cable & Electrical Industries, Kuwait; Boubyan Petrochemicals, Kuwait; Emaar Properties, United Arab Emirates; National Real Estate, Kuwait; Du, United Arab Emirates; Qurain Petrochemical Industries, Kuwait; Qatar Islamic Bank, Qatar; and Arabtec Holding, United Arab Emirates.

As of June 15, the Dow Jones GCC index and the Dow Jones Islamic Market GCC index had annualized price returns of 27.55% and 26.49%, respectively, from the base date Dec. 31, 2003 in a backtest.

The Dow Jones GCC and Dow Jones Islamic Market GCC indexes are calculated in dollars and are reviewed quarterly in March, June, September and December.

"The launch of these new indexes for the GCC region acknowledges the growing global importance of one of the world's most rapidly emerging and most sought after financial markets," Dow Jones Indexes' president, Michael A. Petronella, said in the release. "The Dow Jones GCC and the Dow Jones Islamic Market GCC indexes enable an investor interested in Islamic as well as in conventional finance to participate in the performance of the region."

New York-based Dow Jones Indexes develops, maintains and licenses indexes for use as benchmarks and as the basis of investment products.

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