CMA Executive: Saudi Arabia to Introduce Index to Monitor Investment Fund's Performance

As per Asharq, the assistant undersecretary of registered organisations and Investment items at the Capital Market Authority, Saudi Arabia is planning to come up with an index to analyse the investment fund's performance in the Saudi market. According to Fahd bin Hamdan, the Kingdom's finance industry growth strategy calls for increasing investment fund holdings and subscribers.

According to him, the proposed index would make it easier for clients and investment managers to gauge and assess how well the fund has performed in comparison to other funds from the same industry.

As per bin Hamdan, the proposed index would include publicly traded and privately provided specialist funds, private equity funds, investment firms, and property development funds. Moreover, he stated that the rise in the market for investment vehicles in recent years is a significant factor in the index's introduction.

Simultaneously, the Dubai Financial Market has indeed introduced the latest general index that gives market players investable and tradeable standards for the share market, Zawya stated.

S&P Dow Jones Indices will behave as the revised index's computation provider to improve traders' experience throughout.

The criterion for a DFM index single component will be capped at 10% of the index criteria weights rather than the present 20% under this partnership. As a result, the number of companies in the index will be reduced. Additionally, there will no longer be a semi-annual evaluation, but in place of it, there will be a quarterly rebalance.

The revised approach also includes index computation based on the actual free float and unbiased methodological supervision. In contrast to the DFM Sharia Index, DFM will also introduce eight sector-based indices as a result of continuing negotiations with market players.