S&P launches India 10 Index

Standard & Poor’s, the world’s leading index provider, today announced the launch of the S&P India 10, an index designed to provide investors with tradable exposure to the Indian equity markets.

The S&P India 10 index comprises ten of the largest and most liquid Indian companies which trade on developed market exchanges. Among the companies included in the index are IT and consulting firm Infosys Technologies, ICICI Bank and HDFC Bank, as well as copper producer Sterlite Industries.

“India has ranked among the fastest-growing emerging market economies in recent years but foreign ownership restrictions on local shares have made it difficult for international investors to gain exposure to India’s burgeoning equity markets,” commented Steven Goldin, Vice President, Portfolio Services for Standard & Poor’s.

“The S&P India 10 index is designed to address this accessibility challenge. It offers investors liquidity and investability, and can also serve as a basis upon which to create investment products.”

Net foreign investment into India has increased four-fold since 1998, and both exports and fixed investment have been accelerating at an average annual rate of 24.2% and 15.7% since 2003. The Bombay Stock Exchange Sensitive Index (Sensex) has an annualized return of 43.0% over the period 2002 to 2007. Over the same period, the S&P CNX Nifty Index returned 41.3%.

The S&P India 10 is one of a number of indices planned to be launched by Standard & Poor’s in 2008 to provide investable exposure to narrow but high interest market segments where accessibility and investability are a current challenge. To be eligible for inclusion in the index, stocks must have a float-adjusted market capitalization above US$ 500 million at each annual rebalancing and a six-month average daily trading value above US$ 1 million. The index uses an evolutionary algorithm-driven optimisation to maximise index basket liquidity at each rebalancing which occurs annually in January.

Sourced From: CRISIL Limited

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