Hawkamah to publish MENA market indices from Q2 2009

DUBAI — Starting from the second-quarter of next year, investors wanting to buy shares in publicly listed companies in the Middle East and North Africa (MENA) will be able to rely on a series of market indices to be published by Standard and Poor's (S&P) and Hawkamah, the Institute for Corporate Governance.

By Jose Franco

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Published: Wed 16 Apr 2008, 9:26 AM

Last updated: Sun 5 Apr 2015, 11:40 AM

The two parties announced a partnership yesterday to rank stocks against their peers across MENA's 11 markets, from Morocco to Oman, based on a company's policies on environment and social issues and governance reforms, or ESG.

Called S&P-Hawkamah ESG MENA indices, the project will be pattered from the S&P ESG India Index published in January and have its first issue in a year, officials of the global credit ratings agency S&P and the Dubai-based Hawkamah, which is tasked to advance reforms in corporate governance in the Middle East.

"This project will be a breakthrough at looking into the region," said Dr Nasser Saidi, executive director of Hawkamah. He noted that the MENA region attracts an increasing number of international investors, who want to look into several businesses before investing in their chosen company.

Alka Banerjee, S&P's vice-president for global equities, Product Management Group, Index Servivces, said the MENA Index would be created based on a set of 200 questions, among them, on shareholders' rights, ownership structure and financial standing.

She added that the answers would be taken from the companies' reports made available to the public, such as annual reports, websites, bulletins and disclosures made on stock exchanges. She added that the ratings group would then check the veracity of public disclosures made by the companies through independent sources. This is still part of the two-step process, whose second step involves the weighting of the index by score. "We create the index based on scores, not the size of the companies," she said, adding that ranking companies on their ESG disclosures is increasingly recognised as important in promoting sustainable development. Saidi said the project would seek funding from the international organisations interested in the MENA region, such as the World Bank and the United Nations.

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