The Abu Dhabi Securities Exchange (ADX) will adopt FTSE Russell’s, a subsidiary of London Stock Exchange Group, Industry Classification Benchmark (ICB) for all its listed equities as part of its strategy to align to global standards and attract more international investors.
The ICB is in line with the transition of ADX indices to the co-branded FTSE ADX index series, which is part of FTSE Russell’s strategic partnership with ADX. The adoption of ICB by ADX is aimed at providing greater market transparency, enabling accurate research and supporting institutional investors’ portfolio management and asset allocation strategies.
The partnership between FTSE Russell and ADX to develop co-branded indexes will support the recent launch of ADX’s derivatives market and pave the way for the creation of more index-linked investment products. Earlier this year, the FTSE ADX General Index replaced the ADX General Index.
“The adoption of the ICB and our partnership with FTSE Russell is an important pillar of our ADX One Strategy, underscoring our commitment to embracing best global standards for our market. The ICB will support new indices that we are creating with FTSE Russell, which will encourage the listing of index products and highlight the unique investment opportunities on the ADX, driving greater institutional flows into our market.”
FTSE Russell’s ICB is a rigorous, rules-based transparent methodology to classify companies into relevant sectors, primarily based on a company’s business, determined by its primary source of revenue. The ICB categorizes companies and securities across four classification levels, Industry, Supersector, Sector and Subsector, with each company assigned to a category that best represents its business.
Mr. Arne Staal, Chief Executive Officer, FTSE Russell, said that “ADX’s adoption of ICB’s classification standards will support the exchange’s transparency and standards to meet the requirements of the global investment industry. The step will raise international awareness on investment opportunities across the UAE’s capital markets.”