Dow Jones launches Africa Titans 50 Index

Dow Jones Indexes has launched the Dow Jones Africa Titans 50 Index, a pan-African index that measures the stock performance of 50 companies headquartered in or generating the majority of revenues in Africa.

Market participants have direct or indirect exposure to the 11 markets in Africa through the index. Countries included are 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 a pan-African index will serve as underlying for an ETF.

The Market Vectors Africa Index ETF will become available on July 14 at the New York Stock Exchange.

The Africa Titans 50 Index is weighted by float-adjusted market capitalisation. Each country’s weight is capped at 25% and weights of individual components are capped at 8% with a maximum of 15 companies for a country to be included in the index, companies must have a minimum market capitalisation of $200 million and a minimum three-month average daily trading volume of $1 million.

Five countries — South Africa, Egypt, Kenya, Nigeria and Morocco — are included in the index and currently represent the investable universe. Other African countries are represented where the offshore companies generate the majority of revenues. Among these 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 US dollars and reviewed annually in June with quarterly updates.