The Arab Federation of Exchanges (AFE) has teamed up with data provider Refinitiv to launch the Refinitiv AFE Low Carbon Select Index for equities traded in the Mena region.
The new ESG benchmark will target investors looking to commit capital to companies actively promoting low carbon activity in the region.
According to the AFE and Refinitiv, the index launch reflects the growing interest in sustainable investing in the Mena market while also giving investors the chance to invest in their own markets as opposed to considering other global markets that meet the ESG criteria.
In terms of weighting by country, Saudi Arabia holds the largest share at 39.5% followed by Kuwait (22.3%), the UAE (16.6%), Qatar (13.4%), Egypt (4.5%), and other Mena markets (3.8%).
Rami El-Dokany, Secretary General at the AFE, said that the new index will “pave the way for the creation of investible products in Mena including equity traded funds” and “also contribute to attract asset managers and investment into Mena markets”.
“Our objective is to promote smarter products and companies from the region in global markets,” he added.
Chair at the AFE and executive chairperson at the Egyptian exchange Mohamed Farid Saleh said that the index will also help “drive further integration amongst Arab markets as well” as “driving sustainable performance for corporates and contributing to the regional economic growth trajectory”.
Nadim Najjar, managing director at Refinitiv for the Middle East and Africa, said: “The index will help us look at ESG as an asset class that needs to be prioritized as a value and as a practice in Mena markets.
“Investor relations programmes are lagging in this part of the world, and this new index will further help with the integration of Mena markets.”
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