ADX and FTSE Russell to develop a blue chip equities index

FADX 15 will be launched March 30 and support the Abu Dhabi Securities Exchange derivatives market

The Abu Dhabi Securities Exchange was one of the world's best performing markets last year. Market capitalisation has soared to about Dh1.8 trillion, and the bourse is up about 16 per cent since the start of this year. Photo: ADX
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Abu Dhabi Securities Exchange (ADX), the Arab world's second-largest stock market by market value, and FTSE Russell are teaming up and developing the FTSE ADX 15 Index, a blue chip benchmark that will support the bourse’s recently launched derivatives market and the creation of exchange traded funds and other index-tracking investment vehicles.

FADX 15, the benchmark index, will be launched on March 30 and include the largest and most liquid 15 companies on the ADX, the bourse said in a statement on Tuesday.

The companies were selected using a combination of free float adjusted market capitalisation and median daily trading value.

“The introduction of the FTSE ADX 15 Index is a major milestone that underscores the exchange’s commitment to provide market participants with cutting-edge investment products that align with world-class standards,” said Saeed Hamad Al Dhaheri, managing director and chief executive of ADX.

“The indexes developed in partnership with FTSE Russell will support our aim to create a vibrant and liquid capital market that provides sustainable growth opportunities for investors around the world.”

The creation of the FADX 15 follows ADX's adoption last week of the FTSE Russell’s industry classification benchmark (ICB) for all its listed equities as it seeks to attract more international investors.

The introduction of the ICB is part of the transition of ADX indexes to the co-branded FTSE ADX index series under the partnership between FTSE Russell and the Abu Dhabi bourse.

The Abu Dhabi bourse is the first exchange in the region to use FTSE Russell as its index administrator and is part of a strategy launched last year to attract more foreign investors and enhance liquidity. The partners are developing and launching new indexes to support ADX’s growth.

In January, the FTSE ADX General Index replaced the ADX General Index, and FTSE ADX sector indexes took the place of the existing sector indexes.

The co-branded indexes will also support the ADX derivatives market, launched last year, and pave the way for the creation of more index-linked investment products.

The FADX 15 will be used as the basis for the launch of index products on ADX during the course of this year.

“This collaboration creates next-generation benchmarks for this vibrant and growing market and brings FTSE Russell's world-class index expertise to one of the largest exchanges in the Gulf region,” Arne Staal, chief executive of the FTSE Russell, said.

ADX could host 13 more listings before the end of this year as it seeks to reach a market value of Dh3 trillion ($816.7 billion), Mohammed Al Shorafa, chairman of ADX, said on Monday.

The ADX, which is owned by state holding company ADQ, more than doubled its market capitalisation last year to a record Dh1.6tn – making it one of the best performing exchanges globally in 2021.

The Abu Dhabi bourse's market capitalisation was about Dh1.8tn as of 10.29am UAE time on Tuesday. The market is up about 16 per cent since the start of this year.

Between 2020 and 2021, traded values (buy and sell) on the exchange increased by more than five times to Dh739bn.

Updated: March 29, 2022, 8:10 AM