QE to launch new indices from April
ASIF IQBAL DOHA QATAR Exchange (QE) on Wednesday announced the launch of a number of new equity indices to complement the existing QE Index. The new total return index will measure price performance and income from dividends, said QE Chief Executive Officer Andre Went said on Wednesday.
“The total return version of the QE index will become active from April 1 this year, and will be complementing the current QE price index,” he said.
Giving details about the new indices, Went said by measuring price performance and income from dividends, the total return index will represent the total return earned in a portfolio tracking the underlying price index.
“The present QE index measures only price performance of component stocks, whereas the new index would offer investors the ability to dissect industry performance in realtime, and will prove an effective tool in generating trade ideas or investment strategies,” he said.
The local bourse would also start the all share and sector indices, a series that provides investors with an overall market benchmark and enhanced tools to evaluate sectoral performances in real-time.
Moreover, the post change QE will reflect seven primary sectors from its present four sectors. The seven sectors include, banks & financial services; industrials; transportation; real estate; insurance; telecoms; and consumer goods & services, the QE official said.
“The new sector classification is based on industry standards and best practices,” Went, said, adding that these new indices form part of a strategic goal to offer investors exceptional market visibility.
He said the dividend yields for locally listed companies are some of the highest globally and he expects the QE total return index to be tracked extensively.
Director Product and Market Development at Qatar Exchange Mohsin Mujtaba while explaining the need for the new indices said new products like exchange traded funds (ETFs) require availability of investable benchmark indices in the market and QE plans to launch ETFs before the end of this year.
Mujataba while elaborating on the total return version of the index said, it would reflect income received by way of dividend payments on the 20 stocks.
“The methodology reinvests the dividends in the index on the day a security is quoted ex-dividend,” he said. Commenting on the all share index, Mujtaba said a 15 percent cap would be applied to an individual constituent’s weight in the index, with the excess weight distributed proportionately among the remaining index constituents.