The SGI GCC Invest Index is a liquid and investable equity index aiming to track the performance of 60 of the largest capitalizations of the Gulf Cooperation Council (GCC). The index is capitalization-weighted, built under a set of constraints addressing liquidity issues and foreign ownership limits (“FOL”), while remaining faithful to the market size of member countries. The universe of the SGI GCC Invest Index comprises the following countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates and may change to reflect the evolution of market conditions.
The SGI GCC Invest is a free-float weighted index. The Index methodology solely accounts for outstanding shares available to foreign investors, i.e. public shares subject to foreign ownership limits. 60 stocks are chosen by a systematic stock selection model regarding their capitalization and their liquidity. Basket weights are initially scaled according to free float, then adjusted to comply with a set of diversification (no stock shall exceed 15%, and no country 50%) and liquidity constraints (scaling factors are applied according to a systematic algorithm aiming to optimize each stock’s liquidity to ensure the best execution conditions without altering the characteristics of the basket). The stock selection and weight computation are reviewed every three months in order to ensure the continuous liquidity of the components.