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S&P launches three new indices covering African equity markets

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Global index provider Standard & Poor’s has launched three new benchmark and investible indices, S&P Pan Africa, S&P Africa Frontier and S&P Africa 40, designed to offer in

Global index provider Standard & Poor’s has launched three new benchmark and investible indices, S&P Pan Africa, S&P Africa Frontier and S&P Africa 40, designed to offer investors access to Africa’s developing equity markets, as well as providing a measurement tool for the performance of these markets.

The S&P Pan Africa Index covers 12 African markets, Botswana, Cote d’Ivoire, Egypt, Ghana, Kenya, Mauritius, Morocco, Namibia, Nigeria, South Africa, Tunisia and Zimbabwe. The S&P Africa Frontier Index covers eight smaller frontier markets from sub-Saharan Africa, Botswana, Côte d’Ivoire, Ghana, Kenya, Mauritius, Namibia, Nigeria and Zimbabwe.

The indices aim to capture 80 per cent of the total market capitalisation of each country and provide a comprehensive benchmark for African markets. The S&P African Frontier Index gained 52 per cent over the past three years, while the S&P Pan Africa Index has gained 18 per cent in the same period.

The S&P Africa 40 Index is designed to offer tradable exposure to 40 of the largest and most liquid companies that operate mainly in Africa. Companies must be domiciled in Africa or have the majority of their assets and operations in Africa.

The index is dominated by companies from the financial, materials, telecommunications and industrials sectors, with MTN Group (South Africa), Orascom Construction (Egypt), First Quantum Minerals (Zambia) and Standard Bank Group (South Africa) among the largest constituents. On a historical basis, the S&P Africa 40 recorded returns of 36.35 per cent over the year to March 2008, and 49.78 per cent annualised on a three-year basis.

‘The strong performance of many African markets has made the region an increasingly attractive investment opportunity,’ says Steve Goldin, vice-president for portfolio services at Standard & Poor’s. ‘These new indices provide investors with unique exposure to the African equity markets.’

The S&P Africa Index Series is part of Standard & Poor’s S&P/IFCG and S&P Frontier indices, which date back to 1984, along with the more recent tradable and investible regional index family, which includes the S&P BRIC 40 and the S&P Southeast Asia 40. S&P’s coverage of African markets dates back to 1975.

Standard & Poor’s Index Services maintains a wide variety of investible and benchmark indices including the S&P 500, an index with USD1.32trn invested and USD4.91trn benchmarked, and the S&P Global 1200, a composite index comprised of seven regional and country headline indices.

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