Dow Jones Indexes, a leading global index provider, today launched the Dow Jones Africa Titans 50 Index, a pan-African index that measures the stock performance of 50 companies that are headquartered in or generate the majority of their revenues in Africa. Market participants have either direct or indirect exposure to the following 11 markets in Africa: Angola, Democratic Republic of the Congo (DR Congo), Egypt, Equatorial Guinea, Ghana, Kenya, Mali, Morocco, Nigeria, South Africa and Zambia.
The index has been licensed to Van Eck Global, a provider of global investment products, to serve as the basis for an exchange-traded fund. This is the first time that a pan-African index will serve as underlying for an ETF. The Market Vectors Africa Index ETF (AFK) is available on Monday, July 14 at the New York Stock Exchange.
“The methodology behind the Dow Jones Africa Titans 50 Index provides a balanced reflection of the African markets,” said Michael A. Petronella, president, Dow Jones Indexes. “It was important for us to develop an investable index that gives true exposure to the African region and is open to all African countries that qualify for it. This is the first pure African index to be used as underlying for an ETF.”
“One of the main advantages of the Dow Jones Africa Titans 50 Index is the fact that it also includes companies that are not headquartered or based in Africa, but generate more than 50% of their revenue there,” said Jan van Eck, principal, Van Eck Global. “The investor has the chance to invest in a pan-African portfolio while at the same time participating in the high liquidity and performance of international securities.”
The Dow Jones Africa Titans 50 Index is weighted by float-adjusted market capitalization. Each country’s weight is capped at 25% and weights of individual components are capped at 8% with a maximum of 15 companies per country. For inclusion in the index, companies must have a minimum market capitalization of US$200 million and a minimum three-month average daily trading volume of US$1 million.
The following five countries are included in the Dow Jones Africa Titans 50 Index and currently represent the investable universe: South Africa, Egypt, Kenya, Nigeria, and Morocco. Additionally, other African countries are represented in which the offshore companies generate the majority of their revenues. Among them are: Angola, DR Congo, Equatorial Guinea, Ghana, Mali and Zambia. The three biggest sectors represented in the index are Basic Resources, Banking, and Oil & Gas, according to the super sector classification breakdown.
The index is calculated in U.S. dollars (USD), and reviewed annually in June. Quarterly updates of float factors and shares are performed, in which eligible IPOs are added. These IPOs must list one month in advance of the review to be eligible for consideration at the quarterly update.
For more information on the Dow Jones Africa Titans 50 Index, please visit www.djindexes.com.
