Dow Jones Indexes creates Africa Titans 50 Index to measure performance of African companies

By Devika Patel

Knoxville, Tenn., July 10 - Dow Jones Indexes has formed a new index that measures the performance of 50 companies that have headquarters in or generate the majority of their revenues in Africa, according to a press release.

The Africa Titans 50 Index has been licensed to Van Eck Global, a provider of global investment products, to serve as the basis for an exchange-traded fund. This is the first time that a pan-African index will serve as underlying for an exchange-traded fund.

Market participants have either direct or indirect exposure to the following 11 markets in Africa: Angola, Democratic Republic of the Congo, Egypt, Equatorial Guinea, Ghana, Kenya, Mali, Morocco, Nigeria, South Africa and Zambia.

The index is weighted by float-adjusted market capitalization. Each country's weight is capped at 25% and weights of individual components are capped at 8% with a maximum of 15 companies per country. For inclusion in the index, companies must have a minimum market capitalization of $200 million and a minimum three-month average daily trading volume of $1 million.

The following five countries are included in the Dow Jones Africa Titans 50 Index and currently represent the investable universe: South Africa, Egypt, Kenya, Nigeria and Morocco. Additionally, other African countries are represented in which the offshore companies generate the majority of their revenues. Among them are: Angola, Congo, Equatorial Guinea, Ghana, Mali and Zambia. The three biggest sectors represented in the index are basic resources, banking and oil & gas, according to the super sector classification breakdown.

The index is calculated in U.S. dollars and reviewed annually in June.

"The methodology behind the Dow Jones Africa Titans 50 Index provides a balanced reflection of the African markets," president Michael A. Petronella said in the release.

"It was important for us to develop an investable index that gives true exposure to the African region and is open to all African countries that qualify for it. This is the first pure African index to be used as underlying for an ETF."

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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