Dubai Financial Market officially launches DFM General Index

DFM also announced the regrouping of the 43 listed companies into nine sectors, namely, Banks, Investment and Financial Services, Insurance, Real Estate and Construction, Transportation, Materials, Consumer Staples, Telecommunication, and Utilities. Earlier, all the 43 listed companies were grouped into five sectors, namely, Banking, Insurance, Investment, Services, and Industry.

DFM has also announced the official launch of nine indices for the nine sectors today. The live feed of DFMGI and the nine sectors' indices will be available on DFM's website as well with intermediaries who provide content to the media.

Essa Kazim, Director General of DFM, said:

'We are glad to officially launch the DFMGI. Our technology team and the Index team have done a splendid job. The new DFMGI and the sectors' indices will provide a balanced picture of the market's performance and it will be in sync with global trends.'

'The new sectors' structure is a reflection of DFM's growth and diversity of listed companies' profile and potential listings. DFM has conducted studies about the international standards and adopted by bourses in Arab states as well as other parts of the world.

The new sectors structure will also allow investors to compare activities of different companies within the same sector. Investors will also be able to compare the activity of a sector against another sector by benchmarking with the DFMGI and the nine sectors' indices.

DFM's new sector structure:

[1] Banks sector: Arab Emirates Investment Bank, Commercial Bank of Dubai, Dubai Islamic Bank, Emirates Bank International, Emirates Islamic Bank, Gulf Finance House, Mashreq Bank, National Bank of Dubai, Amlak Finance, and Tamweel.

[2] Investment and Financial Services sector: Dubai Investments, Gulf General Investment Company, Global Investment House, International Financial Advisors, SHUAA Capital, Salam International Investment.

[3] Insurance sector: Alliance Insurance Company, Dubai Islamic Insurance & Reinsurance, Arab Orient Insurance Company, Arab Insurance Group, Arabian Scandinavian Insurance Company, Al Sagr National Insurance Company, Dubai Insurance, Dubai National Insurance & Reinsurance, Islamic Arab Insurance Company, National General Insurance, Oman Insurance Company.

[4] Real Estate and Construction sector: Emaar, Union Properties, Grand Real Estate Projects, National Real Estate Company, Al Mazaya Holding Co., and Arabtec Holding.

[5] Transportation sector: ARAMEX, and Public Warehousing Company.

[6] Materials sector: National Cement Company, Aerated Concrete Industries Company, and National Industries Group Holding K.S.C.

[7] Consumer Staples sector: United Foods Company, Jeema Mineral Water Company, and United Kaipara Dairies.

[8] Telecommunication sector: Emirate Integrated Telecommunications Company.

[9] Utilities sector: National Central Cooling Company (Tabreed).

Methodologies for formulating DFMGI and the sectoral indices:

DFMGI comprising 25 listed stocks is weighted by Total Market Capitalization adjusted by the Free Float, rather than the total number of shares of each company. The market capitalization will be calculated based pm the last trade prices. The maximum limit of weight of a single company in the index is set at 25% in an effort to reduce the influence of large market value companies on the index.

The weight of a company in the index is related to the number of shares available for trading only 'Free Float'. This means excluding the shares of government holdings and all holdings exceeding 5% of a company's capital.

The following matrix shall be implemented for calculating the free float percentage and they shall be applied to all listed companies to determine the market capitalization of each company in the index:


•25% of the market capitalization of the company in case the free for trade shares are between 5% - 25%

• 50% of the market capitalization of a company in case the free-for-trade-shares are between 25% - 50%

• 75% of the market capitalization of a company in case the free-for-trade-shares are between 50% - 75%

• 100 % of the market capitalization of a company in case the free-for-trade-shares are between 75% - 100%

• Any company will be excluded from the index if the free float percentage is less than 5% of its total capital

The following formula will be used to calculate DFMGI:
Index = Sum (new capitalization of companies) x FFF x 1000
Sum (Base date capitalization of companies)

Whereas

- FFF = Free Float Factor that use the above mentioned standard factors:
- Index capitalization of company = price x shares x RF
- RF = Rated factor that used to reduce the market capitalization of any company to a maximum of 25% of the total index market capitalization.
- Index base value is 1000 point
- Base Date: Date of adding the company to the index