Global launches first GCC Telecom Index
Global Investment House “Global” announced today the launch of its new GCC Telecom Index, as part of Global’s series of indices, leveraging the need to track the performance of the booming Telecommunications sector in the GCC region.
Mr. Omar M. El-Quqa, CFA, Executive Vice President at Global, highlighted the vitality of the telecommunications sector in the GCC region. “The Telecom sector has witnessed rapid growth over the past few years, with regional governments embracing the end of monopoly in its quest to liberalize the sector.”
He added that opening up of GCC market will flame up competition between local and international Telecom companies in their pursuit of lucrative opportunities.
Hence, Global took the initiative of composing a new index under the name “Global GCC Telecom Index”. The new index will track the performance of listed Telecommunication companies as an integral part of the GCC region as a whole.
Such an index should help in enhancing the market, as it will work side-by-side on developing more interest among foreign and local investors that are targeting Telecom companies and direct them towards those stocks.
Global GCC Telecom Index comprises of 10 telecom stocks, with a total market capitalization of US$138.36bn as of December 31, 2007, representing 12.44 percent of the total market cap of the GCC listed stocks. Most of those stocks are heavy-weight, like Zain Kuwait, which constitutes 12.6 percent of the total market cap of Kuwait Stock Exchange.
To be added to the index, the company’s article of association has to indicate that it provides mobile phone services, paging, and related services.
The market capitalizations of the companies included in the index are converted into US Dollars using the applicable exchange rates. The index is maintained according to a transparent methodology that is consistent with that of the Global Kuwait Stock Exchange Indices, i.e. an 100% market capitalization weighted index following the formulae of the International Finance Corporation (IFC).
In the future, newly listed Telecom companies on the stock markets, that meet the index’s criteria, will be added to the index on listing date to ensure that the index reflects the actual sector conditions.
Since the inception of the index up till end of 2007, the index managed to achieve a positive annual performance. As per Global GCC Telecom Index, Telecom market grew by a whopping 390.52 percent since its inception in December 1999 up till the end of 2007.