ASEAN, FTSE, start regional indexes

ASEAN, FTSE, start regional indexes

Bloomberg, Kuala Lumpur

The Association of Southeast Asian Nations (ASEAN) and the FTSE
Group on Wednesday introduced two indexes to measure the
performance of stocks in the region and help bolster investor
interest.

The stock markets of Singapore, Malaysia, Thailand, Indonesia
and the Philippines will be represented in the FTSE/ASEAN
benchmark index and the FTSE/ASEAN 40 tradable index, which were
developed by FTSE and the five exchanges, FTSE said in a report
on its Website.

The indexes are the first to be designed specifically for
Southeast Asian stock exchanges, helping investors identify the
biggest companies in a region that's growing faster than the U.S.
and the European Union. In 2004, the five economies represented
in the FTSE/ASEAN indexes grew 5.9 percent, faster than the U.S.
or the EU, according to FTSE.

"ASEAN can be viewed as a region with strong economic growth
fueled by demand from China and western markets," FTSE said in
the report. The indexes "will allow investors to participate in
this expected growth."

Companies for the indexes are selected from the FTSE All-
World Index. The companies must have a market capitalization of
more than US$100 million and are screened for liquidity and free
float weighted, FTSE said.

The FTSE/ASEAN Index tracking the performance of 180 companies
in the five stock markets will be calculated at the end of the
day. The FTSE/ASEAN 40 Index, calculated in real time with the
dollar as the base currency, will track the performance of the 40
largest companies in the FTSE/ASEAN benchmark index, including
DBS Group Holdings Ltd., Singapore Telecommunications Ltd.,
United Overseas Bank Ltd., Oversea-Chinese Banking Corp. and
Malayan Banking Bhd.

The indexes may not do much to boost investment in the
region's stocks, said investors including Chong Sui San.

"What difference would it make as investors would already have
gotten exposure to these stocks" because of their links to the
Morgan Stanley Capital International Inc. indexes, said Chong,
who helps manage $395 million at Allianz General Insurance
Malaysia Bhd.

The indexes were unveiled by ASEAN finance ministers at a
meeting with investors in London on Wednesday, Bursa Malaysia
Bhd., which runs the country's stock exchange, and the other four
exchanges, said in a faxed statement. The indexes, which are
calculated starting on Wednesday, "will increase the visibility
of ASEAN to domestic and international investors," the group
said.

The indexes will allow the stock exchanges to develop
derivative products such as exchange-traded funds, index futures
and options, Bursa Malaysia Chief Executive Officer Yusli Mohamed
Yusoff said in the statement.

Singapore-listed companies form the largest group on the
indexes, followed by Malaysia and Thailand. Singapore stocks
account for 44 percent of the FTSE/ASEAN index and 49 percent of
the FTSE/ASEAN 40 based on market capitalization.

The 10 biggest companies account for 54 percent of the
FTSE/ASEAN 40 and 35 percent of the FTSE/ASEAN Index, according
to FTSE. The top 10 companies in the FTSE/ASEAN 40 had a combined
gross market capitalization of $123.8 billion as at Aug. 31.

ASEAN groups the five economies represented in the indexes, as
well as Cambodia, Vietnam, Myanmar, Brunei Darussalam and Laos.
Malaysia is chairing the regional grouping this year.