Bluechips SABIC, Dubai's Emaar not part of top 10; Middle East, North Africa ranks poorly on governance
Egyptian mobile operator Mobinil and Saudi food company Savola ranked among top companies in Standard and Poor's new stock index aimed at boosting corporate governance in the Gulf Arab markets.
The S&P-Hawkamah Pan Arab ESG Index (HASPI) is a joint venture between the ratings agency and Hawkamah, an institute for enhancing corporate governance in the region and ranks companies on the basis of environmental, social and corporate governance (ESG) standards.
The Middle East, North Africa region - popularly termed as MENA - often ranks poorly on governance and disclosure standards, and transparency issues are key concerns that have kept long-term investors away from the region.
"International institutional investors tend to be wary of the MENA region because of our poor track record in transparency, ESG disclosure and reporting," Nasser Saidi chief economist at Dubai International Financial Centre (DIFC) and director at Hawkamah-Institute said a launch event.
Mobinil has a 3.06 percent weight in the index, while Savola has 3.03 percent, taking the number one and two spots respectively.
Some of the biggest companies in the region, such as chemical maker Saudi Basic Industries Corp (SABIC), Dubai developer Emaar Properties and Kuwaiti telecoms group Zain did not rank among the top ten companies in the index, highlighting the extent of corporate governance issues.
The index includes 50 companies with representations from nine different countries and has a combined market capitalisation of $176bn.
Top-oil producer Saudi Arabia has the highest weighting in the index with 30.3 percent and UAE ranks second with 14.7 percent.
The ratings agency plans to help launch the Gulf Arab region's second exchange-traded fund (ETF) in collaboration with several local providers, it said in November.