Dow Jones Indexes, the leading global index provider, has completed the re-composition of the South Asian Federation of Exchanges (SAFE) family of Dow Jones Indexes following the regular annual review of the index for year.
Aftab Ahmad Chaudhry, Secretary General of the South Asian Federation of Exchanges (SAFE) told Business Recorder here on Sunday that according to the SAFE SG, the changes to the composition of the Dow Jones SAFE-100 Index and the other sub-indexes ie Dow Jones SAFE Pakistan Index, Dow Jones SAFE India Index as well as the Dow Jones SAFE Pakistan Titans 15 Index, will be effective after the close of trading on Friday, March 18, 2011.
He further highlighted that the total free-float market capitalisation of the reconstituted Dow Jones SAFE 100 Index has increased to US $370.88 billion from US $365.30 billion, as of March 10, 2011.
Aftab stated that as a result of the annual review, a total of seven companies, five companies from India and two from Pakistan would stand deleted from the Dow Jones SAFE 100 Index and in their place seven new companies would be added, five from India and one each from Pakistan and Sri Lanka.
The companies which would be removed from the Dow Jones SAFE 100 Index are: Bharat Petroleum Corp Ltd. (India, Oil & Gas, 500547.BY), Reliance Communications Ltd. (India, Telecommunications, 532712.BY), Neyveli Lignite Corp. Ltd. (India, Utilities, 513683.BY), GMR Infrastru-cture Ltd. (India, Utilities, 532754.BY), Reliance Infrastructure Ltd. (India, Utilities, 500390.BY), NIB Bank Ltd. (Pakistan, Banks, NIB.KA) and Jahangir Siddiqui & Co. Ltd. (Pakistan, Financial Services, JSCL.KA).
The seven companies that are being added to the Dow Jones SAFE 100 Index are: Coal India Ltd. (India, Basic Resources, 533278.BY), Adani Enterprises Ltd. (India, Industrial Goods & Services, 512599.BY), Bajaj Auto Ltd. (India, Automobiles & Parts, 532977.BY), Bank of Baroda (India, Banks, 532134.BY), HCL Technologies Ltd. (India, Technology, 532281.BY), Lotte Pakistan PTA Ltd. (Pakistan, Chemicals, LOTPTA.KA) and National Development Bank PLC (Sri Lanka, Banks, NDB.SL), Aftab stated.
The Secretary General of the South Asian Federation of Exchanges (SAFE) stated that the Dow Jones-SAFE 100 index has been conceived under an ambitious initiative of SAFE with the purpose to show-case the collective performance of the selected South Asian markets. The objective of this initiative is to represent the region as one asset class for the international investors,
According to Aftab Chaudhry, Dow Jones SAFE 100 Index measures the performance of 100 blue-chip companies in five of the eight member states of the South Asian Federation of Exchanges (SAFE).
The five member states included in the index are: Bangladesh, India, Mauritius, Pakistan and Sri Lanka.
The Dow Jones South Asian Federation of Exchanges (SAFE) 100 index covers approximately 95% of the underlying market capitalisation. The selection list of Dow Jones SAFE 100 index comprises of top 100 India companies and the top 100 ex-India companies, which is compiled on a quarterly basis. The selection list suggests possible additions or deletions at the next composition review and the index rebalancing is conducted annually during the month of March.
In order to compile the index, stocks are selected separately for India companies and ex-India companies, based on their rankings by full market capitalisation. For India companies, stocks are selected top-down by full market capitalisation rank under the target component number of 50 is reached for the Indian companies. The rest of the 50 companies are selected on ex-India basis.
The Dow Jones SAFE 100 index is weighted by float adjusted market capitalisation. The weight of each represented country is capped at 50%, and the weight of each individual component is capped at 10%.
Dow Jones SAFE 100 index was launched in Abu Dhabi, UAE on March 11, 2009 and initially comprised of 33 Pakistani companies, however after the two subsequent annual reviews; the number of companies from Pakistan has come down to 25 thereby showing a net reduction of eight companies from the launch of the Index.
South Asian Federation of Exchanges (SAFE) is a co-operative platform launched by the bourses in South Asia with a purpose to promote the development and the harmonisation of the securities markets in the region. SAFE is a not for profit association having recognised body status of the South Asian Association for Regional Cooperation (SAARC), and is a network exchange association of the World Federation of Exchanges (WFE).
The operations, activities, and the programs of the Federation are primarily funded by its member exchanges, while some specific projects get sponsorships from some multilateral donor/development agencies.
South Asian Federation of Exchanges (SAFE) comprise of thirty-two (32) member entities from the South Asian Association for Regional Cooperation (SAARC) Region (Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka) as well as from Bahrain, Mauritius and UAE. As of March 2011, SAFE consists of fifteen (15) regional stock & commodity exchanges as Primary Members; eight (8) Associate Members comprising of non regional exchanges, depository & clearing institutions, five (5) Affiliate Members and four (4) Affiliate Associations. The permanent Secretariat of SAFE is located at Islamabad, Pakistan. The Secretariat activities are being handled and managed by Aftab Ahmad Chaudhry, the Secretary General SAFE and Ms Farzin Khan, Deputy Secretary General.