SAFE to launch unified regional index next year
Friday, 12 December 2008
Kayes M Sohel
The South Asian Federation of Exchanges (SAFE), a platform of South Asian capital markets, is expected to launch a unified regional index by mid-2009 to promote the region as a lucrative investment destination.
The SAFE activities has been going at a snail's pace due to strained political relationship between India and Pakistan as it failed to achieve anything even after eight years since its inception, a source said.
"The progress to make the objectives successful, including cross-border listing and trading securities and to exchange information among its member countries is moving slowly because of political rivalry between Pakistan and India," a SAFE official, requesting not to be named, told the FE
The introduction of special index styled Dow Jones-SAFE Regional Index will prove a correct step in the right direction, and enable the capital markets to indicate true potential of investment in the regional markets, said an official Friday.
"The index is likely to be launched by mid next year, provided everything goes well. The technical work for launching the unified index is on," said Maksudur Rahman, manager of Chittagong Stock Exchange (CSE).
He also said, "The design of the index is focused on keeping it balanced with representations of top companies of the entire region."
Cooperation of the central banks of the region is required to make the process faster and to set up a regional clearing house, he added.
To this end, a Memorandum of Understanding (MoU) has already been signed between SAFE and Dow Jones Indexes Inc, New York for technical assistance.
"The cross-border trading is another key project of the SAFE. In this respect, a study was carried out for two years (2003-04). But it is a complex issue as the listing regulations is not similar among the regional securities regulators," Maksudur said.
To remove the problem, South Asian Regulators Forum (SARF) was formed in 2000 to cooperate and to exchange information, he said.
The proposal for launching a the Index was promoted by SAFE in its executive committee meeting of 2006 and later approved in the Annual General Meeting, both held in Colombo Sri Lanka in November, 2006.
The proposal detailed that it would be aimed at measuring and reflecting performance of leading stocks of the prominent market sectors, listed at the SAFE Member Exchanges.
The SAFE Index, by providing an overview of the performance of the SAFE equity markets as a regional group, would highlight its investment potential. It would also serve as an underlying tool for developing new investment products in the region.
Dow Jones Indexes, a unit of Dow Jones and Company, is a leading global full-service index provider that develops, maintains and licenses indexes for use as benchmarks and as the basis of investment products.
SAFE is a forum launched by bourses in 2000 under the initiative of CSE to promote the development of securities markets in the region. The inception of SAFE marks an important milestone in the march of South Asian capital markets towards regional and global integration.
The members of SAFE have agreed to work towards common standards including international accounting standards and best business practices in capital markets. SAFE will represent its members in related international forums, encourage cross-border listing, co-operate in human resource development, facilitate technology transfer among members and address other issues of common interest.
SAFE comprises of 20 entities from eight countries which include Bombay Stock Exchange, Dhaka Stock Exchange, Chittagong Stock Exchange, Colombo Stock Exchange, Islamabad Stock Exchange, Karachi Stock Exchange, Maldives Stock Exchange (pvt) Limited, National Stock Exchange of India, Nepal Stock Exchange, the Stock Exchange of Mauritius Limited and the Royal Securities Exchange of Bhutan.
The South Asian Federation of Exchanges (SAFE), a platform of South Asian capital markets, is expected to launch a unified regional index by mid-2009 to promote the region as a lucrative investment destination.
The SAFE activities has been going at a snail's pace due to strained political relationship between India and Pakistan as it failed to achieve anything even after eight years since its inception, a source said.
"The progress to make the objectives successful, including cross-border listing and trading securities and to exchange information among its member countries is moving slowly because of political rivalry between Pakistan and India," a SAFE official, requesting not to be named, told the FE
The introduction of special index styled Dow Jones-SAFE Regional Index will prove a correct step in the right direction, and enable the capital markets to indicate true potential of investment in the regional markets, said an official Friday.
"The index is likely to be launched by mid next year, provided everything goes well. The technical work for launching the unified index is on," said Maksudur Rahman, manager of Chittagong Stock Exchange (CSE).
He also said, "The design of the index is focused on keeping it balanced with representations of top companies of the entire region."
Cooperation of the central banks of the region is required to make the process faster and to set up a regional clearing house, he added.
To this end, a Memorandum of Understanding (MoU) has already been signed between SAFE and Dow Jones Indexes Inc, New York for technical assistance.
"The cross-border trading is another key project of the SAFE. In this respect, a study was carried out for two years (2003-04). But it is a complex issue as the listing regulations is not similar among the regional securities regulators," Maksudur said.
To remove the problem, South Asian Regulators Forum (SARF) was formed in 2000 to cooperate and to exchange information, he said.
The proposal for launching a the Index was promoted by SAFE in its executive committee meeting of 2006 and later approved in the Annual General Meeting, both held in Colombo Sri Lanka in November, 2006.
The proposal detailed that it would be aimed at measuring and reflecting performance of leading stocks of the prominent market sectors, listed at the SAFE Member Exchanges.
The SAFE Index, by providing an overview of the performance of the SAFE equity markets as a regional group, would highlight its investment potential. It would also serve as an underlying tool for developing new investment products in the region.
Dow Jones Indexes, a unit of Dow Jones and Company, is a leading global full-service index provider that develops, maintains and licenses indexes for use as benchmarks and as the basis of investment products.
SAFE is a forum launched by bourses in 2000 under the initiative of CSE to promote the development of securities markets in the region. The inception of SAFE marks an important milestone in the march of South Asian capital markets towards regional and global integration.
The members of SAFE have agreed to work towards common standards including international accounting standards and best business practices in capital markets. SAFE will represent its members in related international forums, encourage cross-border listing, co-operate in human resource development, facilitate technology transfer among members and address other issues of common interest.
SAFE comprises of 20 entities from eight countries which include Bombay Stock Exchange, Dhaka Stock Exchange, Chittagong Stock Exchange, Colombo Stock Exchange, Islamabad Stock Exchange, Karachi Stock Exchange, Maldives Stock Exchange (pvt) Limited, National Stock Exchange of India, Nepal Stock Exchange, the Stock Exchange of Mauritius Limited and the Royal Securities Exchange of Bhutan.