JEDDAH, 15 August 2006 — BMG Financial Advisors (BMG) yesterday announced the creation of BMG Saudi Index, with investability, total return index and liquidity as its main features.
BMG has invested fully in the development of this index to benefit the Saudi investment community by adopting a consistent, globally accepted methodology to calculate its index.
The index will include the top 30 most liquid stocks in the Saudi stock market. The index will be US dollar-based and weighted according to the market capitalization of the individual companies, while excluding government ownerships. Tadawul is the official source for all corporate actions.
The index is derived as follows: It is a total return index meaning that it accounts for any dividends paid or distributions made. The constituents that make up the index are chosen according to genuine liquidity criteria.
Initially, all stocks listed on Tadawul are ranked based on the number of days traded during a quarter. Following that, the shares are ranked based up on the daily value traded and the total number of transactions.
The index will include the top thirty companies based on their market capitalization weighted after eliminating any government ownership.
Basil Al-Ghalayini, chief executive officer of BMG Financial Advisors, said: “We are trying to introduce value added services which educate investors and participants.
The BMG index will be used as another benchmark by portfolio managers and investors to measure the performance of their portfolios. I am sure that more indices will help investors gain insight on how to react to economic trends over time, allowing for better investment decisions through reviewing the historical and current movements of the stock market.”