(MENAFN - The Peninsula) Qatar's main benchmark index 'DSM 20 Index' is being re-branded as 'QE Index' from May 6 after reshuffling.
The companies being removed from the 20-stock index include Qatar Meat and Livestock Company (Mawashi), Gulf Warehousing, Medicare Group, Qatar Islamic Insurance and Qatar Fuel (Woqod).
They will be replaced by Qatar Electricity and Water Company (Kaharba), Qatar Telecom (Qtel), Gulf International Services, Vodafone Qatar and Qatar Insurance.
From May 6, the new QE Index will be based on free float market capitalisation and average daily traded value, a QE statement said yesterday.
There are two other criteria a listed entity must meet in order to be eligible to join the index—a minimum yearly velocity of five percent and individual shareholder ownership limit of at least one percent.
"The QE Index will effectively be a continuation of the DSM 20 as it will still reflect the behavior of the most important stocks," added the QE statement.
Commenting on the upcoming changes, QE's CEO, Andre Went said: "The changes reflect the evolution of the market and bring the index in line with international standards and best practices."
He continued: "The increased transparency means that the selection of stocks will be clear and predictable to all listed companies and market participants. The overall enhancements to the current index are beneficial to public investors in Qatar and will contribute to the development of the liquidity of the market."
Under the new index practices, a review will be carried out twice a year to ensure that the selection and weighting of the constituents continues to reflect the purpose of the index.
The QE Index will include, aside from the five listed firms mentioned earlier, Barwa Real Estate, Commercialbank, Doha Bank, Gulf Holding, Gulf International Services, Industries Qatar, Alkhaliji bank, Al Rayan Bank, National Leasing. Nakilat, Qatar Islamic Bank, Qatar International Islamic Bank, Qatar National Bank, Qatar Navigation, Salam International and UDC.
The QE statement added that in the context of the introduction of a wider range of indices later this year, it expects further refinements to the QE Index selection rules going forward.
Qatar's exchange, which in 2009 entered a strategic partnership with NYSE Euronext, has gained 7.7 percent this year to be the third-best performing Guf Arab benchmark, behind Saudi Arabia and Oman.
"The new index will reflect what fund managers who benchmark against the index can accomplish," said Keith Edwards, head of asset management at Doha-based investment company The First Investor.
Qtel, the fourth-largest listing on the Qatar bourse but which has been excluded from the leading index so far, will be one of five stocks added to the index.
"Qtel is one of the major stocks in Qatar and should be in the index," added Edwards.