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New S&P Index Launched in Response to Accelerating Investor Interest in Africa

AFRICA_GIRAFFA

S&P Indices has launched the S&P Access Africa, a tradable index comprised of the largest and most liquid equities issued by companies that operate purely in Africa or derive more than 50% of their revenues from the continent. The Index is launched in response to increasing demand from investors in blue chip African companies and companies from other markets which have significant exposure to the African economies.


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All companies trading on the Johannesburg Stock Exchange are eligible for inclusion in S&P Access Africa, subject to meeting all other eligibility criteria. Also eligible are all African-domiciled companies listed in developed markets, and other companies listed in developed markets that have the majority of their assets and operations in Africa.

Michael Orzano, Associate Director of Global Equity Indices at S&P Indices, said: “Rising global demand for natural resources, improvements in infrastructure and the emergence of the consumer classes have turned Africa into an increasingly popular destination for investors. S&P Indices is seeing increasingly active interest from the investment community for African indices capable of supporting tradable products. As a tradable emerging market index focused solely on the African continent, S&P Access Africa meets this demand.”

In order to be included in the S&P Access Africa, stocks must have a market capitalisation of at least US$200 million. They must also have an average daily traded value of US$1 million over any three-month period. The Index limits the number of companies from any single country to 20 stocks, based on country of listing.

The index consists of 45 stocks including:

·         Johannesburg-listed AngloGold Ashanti Ltd, Nedbank Group and Vodacom Group Ltd

·         New York-listed Excel Maritime Carriers Ltd and Vaalco Energy Inc

·         Toronto-listed Anvil Mining, Golden Star Resources Ltd and TransGlobe Energy Corp

·         London-listed Anglo American Plc, Old Mutual and Tullow Oil

·         Sydney-listed Extract Resources Ltd, Paladin Energy Ltd and Resolute Mining Ltd

Simultaneously, S&P is offering risk control versions of this new African index. This allows investors to limit volatility while investing in companies exposed to Africa  by replacing equities with a cash component if volatility levels go beyond a certain level. The risk control versions will be for 10%, 15%, and 18% volatility levels.

Source: ETFWorld – S&P Indices

 


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