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Dubai Financial Market (DFM) yesterday announced the soft launch of its new DFM General Index (DFMGI) after the closure of DFM’s trading session on November 23, 2006. The new index will comprise stocks of listed companies whose primary listings debuted on DFM on or after January 1st, 2004. Live performance of the new DFMGI will be available on DFM’s website (www2.dfm.ae).
Essa Kazim, Director General of DFM, said: “The soft launch of DFMGI will last for few days, after which it will be officially launched next week. Post date of launch, DFMGI will be the new reference point.”
“The soft launch is an effort to give opportunity to its customers and companies from the region and across the world to see the index in operation. A one-week window will allow companies, intermediaries and all other stakeholders to adjust to the new DFMGI,” he added.
“DFM has concluded the calculation of data pertaining to debut, floating stock and the percentage weightage. We have conducted adequate trial runs to ensure proper operation of the index during live trading sessions,” he noted.
The new DFMGI will have two critical parameters when compared to the old index. Firstly, the last traded price of a stock will be considered as the closing price. Secondly, the free float of a stock will be considered for calculating market capitalization of that company. The maximum limit of weight of a single company in the index is set at 25%.
The following table reflects a latest review of the new DFMGI for companies listed on the index. The list also includes the percentage of weight of company listed on the index.
The following parameters are applied for calculating the new index:
On January 1, 2004, the new index started calculating the market value based on the price of last trade of securities on December 31, 2003. The index has recorded 1000 points on January 1, 2004.
During 2004 and 2005, the index has seen a strong increase reflecting the market’s good performance. Its value came up by 152 per cent during 2004, approaching 2515 points. In 2005, the index continued to rise in tandem with the market’s continuous growth. It reached 7426 points on December 31, 2005, a 195 per cent increase as compared to the beginning of 2005.
In 2006, DFMGI dropped by 42 per cent during first half as compared to the beginning of 2006, reaching 4276 points due to the market conditions. The index dropped by 43 per cent during the second half as compared to the first half in 2006. It stands at 4202 points on November 20, 2006.
The following graph shows DFMGI performance during 2005 and 2006.
