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The ADX and the DFM have completed their semiannual rebalance, adding new companies to their indices and adjusting the weights of others.
FTSE ADX indices welcome five new entrants: The Abu Dhabi Securities Exchange added five companies to its benchmark FTSE ADX General Index and FTSE ADX 15 (FADX15) Index, according to a statement. The FTSE ADX 15 counts the top ADX listed companies according to a combination of free float adjusted market cap and median daily trading value, according to an ADX FAQ sheet (pdf).
The new entrants: E7 Group, Investcorp Capital, and Phoenix Corp were all added to the FTSE ADX General Index, while Pure Health Holdings and Phoenix Corp were added to the FTSE ADX 15 index.
DFM updates share weights: The Dubai Financial Market (DFM) also adjusted the weights of listed shares on its General Index (DFMGI) and Shari’a Index (DFMSI) as part of its semiannual rebalance, the bourse said in a statement.
The heavyweights: The rebalance saw 10 companies account for 73.48% of the general index, with Emirates NBD, Dubai Islamic Bank, Emaar Properties, and Dubai Electricity and Water (Dewa) maintaining their weight at 10% each, followed by the Commercial Bank of Dubai with 6.5%, Air Arabia with 5.97%, Dubai Investments with 5.57%, and Emaar Development with 5.43. Air Arabia’s weight was adjusted from December’s 6.19%.
A technical glitch in the FTSE ADX 15 index led to an erroneous reading of an initial market increase of over 6% after the index’s semi-annual rebalancing, Asharq Business reports. The index was up 0.73% at the close of trading.
S&P REBALANCES TWO UAE INDICES-
S&P also completed the quarterly rebalancing for two indices last week, removing one security and adding one to its S&P UAE Domestic Shariah Liquid 35/20 Capped Index. The rebalancing also included a switch of three constituents from the S&P UAE BMI Liquid 20/35 Capped Index.
S&P Shariah Liquid 35/20: Ghitha Holding was added to the index, while Deyaar Development Company was rotated out, Abu Dhabi-based asset management firm Lunate Capital — which has an exchange-traded fund for the S&P index — said in a DFM disclosure (pdf).
S&P UAE BMI Liquid 20/35: Al Seer Marine Supplies & Equipment Co, Ghitha Holding, and Salik Company were all added to the index, while Arkan Building Materials, Dubai Financial
Market, and Taaleem Holdings were removed, according to a separate DFM disclosure (pdf).
SOUND SMART- So what exactly is rebalancing, you ask? Rebalancing is a form of index maintenance that adjusts the constituents (fancy-talk for the traded companies that make up the index) to make sure representation is in line with the index’s overall goal, whatever it might be. The ADX and DFM each set inclusion rules based on freefloat market capitalization and trading activity, which are designed to create an index that includes companies or constituents that are both large and actively traded.
