ASEAN, FTSE, start regional indexes<\/p>\n
Bloomberg, Kuala Lumpur<\/p>\n
The Association of Southeast Asian Nations (ASEAN) and the FTSE
\nGroup on Wednesday introduced two indexes to measure the
\nperformance of stocks in the region and help bolster investor
\ninterest.<\/p>\n
The stock markets of Singapore, Malaysia, Thailand, Indonesia
\nand the Philippines will be represented in the FTSE\/ASEAN
\nbenchmark index and the FTSE\/ASEAN 40 tradable index, which were
\ndeveloped by FTSE and the five exchanges, FTSE said in a report
\non its Website.<\/p>\n
The indexes are the first to be designed specifically for
\nSoutheast Asian stock exchanges, helping investors identify the
\nbiggest companies in a region that's growing faster than the U.S.
\nand the European Union. In 2004, the five economies represented
\nin the FTSE\/ASEAN indexes grew 5.9 percent, faster than the U.S.
\nor the EU, according to FTSE.<\/p>\n
\"ASEAN can be viewed as a region with strong economic growth
\nfueled by demand from China and western markets,\" FTSE said in
\nthe report. The indexes \"will allow investors to participate in
\nthis expected growth.\"<\/p>\n
Companies for the indexes are selected from the FTSE All-
\nWorld Index. The companies must have a market capitalization of
\nmore than US$100 million and are screened for liquidity and free
\nfloat weighted, FTSE said.<\/p>\n
The FTSE\/ASEAN Index tracking the performance of 180 companies
\nin the five stock markets will be calculated at the end of the
\nday. The FTSE\/ASEAN 40 Index, calculated in real time with the
\ndollar as the base currency, will track the performance of the 40
\nlargest companies in the FTSE\/ASEAN benchmark index, including
\nDBS Group Holdings Ltd., Singapore Telecommunications Ltd.,
\nUnited Overseas Bank Ltd., Oversea-Chinese Banking Corp. and
\nMalayan Banking Bhd.<\/p>\n
The indexes may not do much to boost investment in the
\nregion's stocks, said investors including Chong Sui San.<\/p>\n
\"What difference would it make as investors would already have
\ngotten exposure to these stocks\" because of their links to the
\nMorgan Stanley Capital International Inc. indexes, said Chong,
\nwho helps manage $395 million at Allianz General Insurance
\nMalaysia Bhd.<\/p>\n
The indexes were unveiled by ASEAN finance ministers at a
\nmeeting with investors in London on Wednesday, Bursa Malaysia
\nBhd., which runs the country's stock exchange, and the other four
\nexchanges, said in a faxed statement. The indexes, which are
\ncalculated starting on Wednesday, \"will increase the visibility
\nof ASEAN to domestic and international investors,\" the group
\nsaid.<\/p>\n
The indexes will allow the stock exchanges to develop
\nderivative products such as exchange-traded funds, index futures
\nand options, Bursa Malaysia Chief Executive Officer Yusli Mohamed
\nYusoff said in the statement.<\/p>\n
Singapore-listed companies form the largest group on the
\nindexes, followed by Malaysia and Thailand. Singapore stocks
\naccount for 44 percent of the FTSE\/ASEAN index and 49 percent of
\nthe FTSE\/ASEAN 40 based on market capitalization.<\/p>\n
The 10 biggest companies account for 54 percent of the
\nFTSE\/ASEAN 40 and 35 percent of the FTSE\/ASEAN Index, according
\nto FTSE. The top 10 companies in the FTSE\/ASEAN 40 had a combined
\ngross market capitalization of $123.8 billion as at Aug. 31.<\/p>\n
ASEAN groups the five economies represented in the indexes, as
\nwell as Cambodia, Vietnam, Myanmar, Brunei Darussalam and Laos.
\nMalaysia is chairing the regional grouping this year.<\/p>",
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