The International Finance Corporation, a member of the World Bank Group, recently announced that it would be adding three new indexes to its series of emerging markets indexes by mid-1999. The IFC is still developing new indexes that will track stocks on the Omani, Bahraini and Lebanese stock exchanges.
As with all IFC indexes, the newcomers will represent 65-75% of each country's market capitalization and consist of only the most actively traded stocks. Partial ownership of an index constituent by the country's government or another index constituent will result in adjustments by the IFC to nullify the effects of that ownership.
Indexes for Oman, Bahrain and Lebanon are initially calculated on a stand-alone basis. It is anticipated that the countries will join the relevant Composite and Regional indexes at the next re-balancing in November 1999. The question has yet to be resolved as to whether the new indexes will join the IFC's Investable Index, Daily Global Index or Monthly Frontier Market Index, said a spokeswoman.
The IFC's creation of indexes based on a country's stock exchange "can but does not necessarily lead to increased portfolio flows in these economies," she said. However, she added that it does raise the profile of emerging economies on a global level.
The three new indexes will extend the IFC's coverage of the Middle East, where its indexes already include Egypt, Israel, Jordan, Morocco, Saudi Arabia and Tunisia. S