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Refinitiv, Arab Federation of Exchanges roll out low-carbon index in MENA

Refinitiv, Arab Federation of Exchanges roll out low-carbon index in MENA
Saudi Arabia is the largest country weight in the Index

Mubasher: Refinitiv and the Arab Federation of Exchanges (AFE) on Monday announced the launch of the Refinitiv AFE Low Carbon Select Index in the MENA region.

The new index, a benchmark of environmental, social, and governance (ESG) indices, offers investors the opportunity to invest in companies that promote and invest in low carbon activities in the region, according to a statement.

Saudi Arabia is the largest country weight in the Index with a 39.5% position, followed by Kuwait (22.3%), UAE (16.6%), Qatar (13.4%), Egypt (4.5%), and other MENA markets (3.8%).

Over the course of five years, the annualised return of the Refinitiv AFE Low Carbon Select Index advanced by 5.1%, surpassing the Refinitiv free float Index for eight MENA markets that registered 3%.

In 2019, the annual return for the Refinitiv AFE Low Carbon Select index stood at 19.75%, compared to 12.52% recorded by the Refinitiv MENA Index.

The launch of this index will pave the way for the creation of investible products in MENA including Equity Traded Funds. The Index will also contribute to attracting asset managers and investment into MENA markets,” Secretary General of AFE, Rami El-Dokany, said.

Our objective is to promote smarter products and companies from the region in global markets. During the COVID-19 Pandemic, the regional ESG portfolio showed a promising potential for Arab companies that are looking at consolidating their positions in this area globally,” he noted.

Nadim Najjar, Managing Director, Middle East and Africa (MEA), Refinitiv, said: “ESG metrics are now critical in portfolio analysis, equity research, screening or quantitative analysis across MENA markets.”

Refinitiv ESG databases cover over 70% of global market cap, across more than 450 different ESG metrics, with history going back to 2002. With local language expertise and operating from different locations across the globe, we process numerous publicly available information sources with the aim of providing up-to-date, objective and comprehensive ESG coverage,” he added.