CIB, EFG Hermes make it onto Refinitiv, AFE’s new regional green index: CIB and EFG Hermes are among 30 regional companies included in the new Low Carbon Select Index brought to market by the Arab Federation of Exchanges (AFE) and market data provider Refinitiv, according to a list of constituents on Refinitiv’s website. Launched yesterday, the index provides investors with access to low-carbon equities across the Middle East and North Africa, according to a joint press release. Egyptian issuers make up 4.5% of the index, while Saudi Arabia leads the weighting with 39.5%, followed by Kuwait (22.3%), the UAE (16.6%), Qatar (13.4%) and other MENA markets (3.8%).

An ESG-led approach to investing in MENA would have outperformed in the past five years: Over a five-year period (pdf), the Refinitiv AFE Low Carbon index has outperformed Refinitiv’s freefloat MENA index, generating a 19.75% return in 2019 compared to 12.52% for the same year by the freefloat. “During the covid-19 pandemic, the regional [environmental, social and governance (ESG)] portfolio showed a promising potential for Arab companies that are looking at consolidating their positions in this area globally,” said AFE Secretary-General Rami El Dokany,

Minimum index criteria: Constituents must maintain a 10% minimum freefloat, have a minimum trading history of three months, and be part of the top 99.5% of the freefloat market cap on their exchanges. The index stipulates companies have a minimum unadjusted market cap of USD 150 mn and a minimum freefloat adjusted market cap of USD 75 mn.