Three Bangladeshi cos selected for Dow Jones SAFE-100 index

Sphere: Related Content Three Bangladeshi companies have qualified to be enlisted in the Dow Jones index from South Asian region, an achievement that will help to elevate the image of Bangladesh.

"The Dow Jones SAFE 100 index was launched on Wednesday but we still don't know the names of the three companies qualified for the prestigious index," said AB Siddiqui, chief executive officer of Chittagong Stock Exchange.

The index was introduced at the annual general meeting of South Asian Federation of Exchanges (SAFE) held in Abu Dhabi on March 10-11.

The companies would definitely among the top ones in the country as it is a blue chip index of Dow Jones, he said.

A support staff of Dow Jones confirmed this reporter through e-mail that the initial selection of 100 companies for the Index has been completed but declined to provide the names of three Bangladeshi companies as the data is available to licensees only.

The index measures the performance of the 50 largest Indian stocks and 50 of the largest stocks traded in Bangladesh, Mauritius, Pakistan and Sri Lanka. The index includes three Bangladeshi, five Mauritian, 39 Pakistani and three Sri Lankan stocks.

This is the first time an index has been created to measure the performance of blue-chip companies in five of the eight member states of the SAFE, Mr Siddiqui said.

Fifteen stock exchanges from eight countries are the members of SAFE and companies from five countries are eligible to be included in the index.

The benefit of being qualified for inclusion in such an index is that it would enhance the scope of attracting more foreign funds, he said.

"At the same time the index will also give a positive signal to international investors about the economic performance of the region," he explained.

The SAFE started working on launching the index in 2006 and eventually signed a partnership agreement with the Dow Jones later.

The index would be aimed at measuring and reflecting performance of leading stocks of the prominent market sectors, listed with the SAFE member exchanges, and would highlight its investment potential.

"The index can also serve as an underlying tool for developing new investment products like derivatives in the region," said Mr Siddiqui.

Dow Jones selects 100 Indian and 100 non-Indian companies from a pool of stocks on quarterly basis and the selection list suggests possible additions or deletions at the next composition review. The stocks are selected based on their rankings by market capitalization.

Michael A. Petronella, president, Dow Jones Indexes after launching the index earlier said it would provide accurate, transparent and reliable performance measures of leading companies in this region.

"South Asia is home to some of the most rapidly evolving financial markets worldwide. By further developing securities markets and aiming at their regional and international integration the South Asian Federation of Exchanges has been contributing significantly to these developments," he said.

Aftab Ahmad Chowdhury, managing director and CEO of Islamabad Stock Exchange and secretary general SAFE said, "The index showcases the region as one asset class and can thank to its superior methodology being used as an underlying tool for investment products on national and international level alike."

The SAFE 100 index is calculated in US dollars and it is weighted by float-adjusted market capitalisation. The weighing of each country in the index is capped at 50 per cent, each component is capped at 10 per cent subsequently.

The Dow Jones SAFE Indexes are rebalanced annually in March. Their free-float factors, shares and weight factors are reviewed quarterly in March, June, September and December every year.