Abu Dhabi Securities Exchange (ADX) selected global index and analytics provider FTSE Russell as its benchmark administrator for its domestic equity indexes as it seeks to attract more overseas investors.
FTSE Russell will begin providing daily index calculations on the general index, which includes all companies listed on ADX and nine sector-specific indexes covering banks, consumer staples, energy, financial services, industrials, insurance, real estate, services and telecoms. A new series of sustainable finance indexes and Sharia-compliant indexes are also planned.
“The agreement signed today with FTSE Russell is of special significance for ADX. We are honoured to benefit from FTSE Russell’s reputation and expertise as a leading global index provider to develop our new indexes,” said Khalifa Al Mansouri, chief executive of ADX.
“The new indexes will enhance our market attractiveness to foreign investors and improve the global competitiveness of our trading environment.”
ADX’s indexes cover over 66 listed companies that had a total market capitalisation of more than $141.7 billion (Dh520bn) by the end of 2019.
Indexes are used by financial institutions and asset owners for a variety of purposes including to benchmark performance, inform product development, conduct market research and analysis as well as to underpin exchange traded funds.
About $15 trillion worth of assets globally track FTSE Russell indexes. The company calculates thousands of indexes benchmarking stock markets and other assets classes in 70 countries.
FTSE Russell classifies the UAE as a “secondary emerging” market within its Global Equity Index Series.
“The partnership with Abu Dhabi exchange is really an important step for us to be able to increase our presence in the region,” said Waqas Samad, chief executive of FTSE Russell.
The company operates in different countries in the region.
"We added Saudi Arabia to our emerging markets index in tranches and March will be the final tranche of adding Saudi Arabia to our emerging markets index. We also operate in Kuwait and of course in the UAE.”
The proposed merger between Abu Dhabi Power Corporation and Abu Dhabi National Energy Company, or Taqa, as the company is known, will have a positive impact on the Abu Dhabi stock exchange, Mr Al Mansouri said.
Currently, the two biggest stocks on the Abu Dhabi market — First Abu Dhabi Bank and Etisalat, have a combined weighting equating to about 65 per cent of the overall market's capitalisation, but the merged utility will now create a third market heavyweight.
“On Taqa, if the offer goes through, it would create an entity north of Dh100bn, in addition to Dh540bn market capitalisation of [the Abu Dhabi Securities Exchange]. We are excited about the partnership,” he said.
In 2020, ADX is looking at starting new international collaborations, evaluating the introduction of new asset classes, implementation of digital transformation strategies, among others.