Standard & Poor’s (S&P) has launched the S&P Access Africa Index, which is comprised of African blue-chip equities.
The tradable index is made up of the largest, most liquid equities that operate in Africa or earn more than half of their revenue there. The stock gauge includes three companies listed on the Australian Stock Exchange.
“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 associate director of global equity indices Michael Orzano said.
“S&P Indices is seeing increasingly active interest from the investment community for African indices capable of supporting tradable products.”
Stocks included in the S&P Access Africa Index 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 a three-month period. The index limits the number of companies from any single country to 20 stocks.
The index is made up of 45 stocks, including Johannesburg-listed AngloGold Ashanti, Nedbank Group and Vodacom Group. It also includes New York-listed Excel Maritime Carriers and Vaalco Energy; Toronto-listed Anvil Mining, Golden Star Resources and TransGlobe Energy Corp; London-listed Anglo American, Old Mutual and Tullow Oil; and Sydney-listed Extract Resources, Paladin Energy and Resolute Mining.
S&P is offering risk-controlled versions of the new African index. The risk-controlled index allows investors to limit volatility while investing in companies exposed to Africa by replacing equities with cash if volatility levels go beyond a certain level.
The risk control versions will be for volatility levels of 10 per cent, 15 per cent and 18 per cent.
