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Lyxor to launch first Gulf focused ETF

Leonora Walters
By Leonora Walters  29-Jul-2008

Lyxor ETF has launched the first exchange traded fund (ETF) to focus on the Gulf region which will be based on the FTSE Coast Kuwait 40 Index, and it is likely to be the first of many ETFs based on the region.


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Lyxor said it has launched the ETF to meet a growing demand from its clients for investment opportunities in the Gulf region. It has chosen the FTSE Coast Kuwait 40 Index because it achieves diversification and avoids the volatile performance of a single stock or sector.

FTSE said this should be the first of many ETFs from the region because it has a number of projects in line. And SPA ETF is believed to be working on a product based on Oman, while the Abu Dhabi Stock Exchange is looking to list ETFs.

The FTSE Coast Kuwait 40 Index represents the performance of the Kuwait Stock Exchange in real time, for the purpose of trading exposure and derivative trading on this exchange. Companies are listed on the Kuwait Stock Exchange by free float market adjusted cap and liquidity, and the FTSE Coast Kuwait 40 includes the top 40.

The three main sector constituents of the index are banking which accounts for 32%, IT and telecoms representing 22% and investments representing 17%.

The ETF is expected to attract both Kuwaiti and international investment, and Imogen Dillon-Hatcher, managing director of FTSE Group EMEA, said this country would make a good investment, especially as it has not been affected by the credit crunch as western countries have. This comes as FTSE in conjunction with a number of countries across the Middle East and North Africa prepares to launch indices for small to medium sized enterprises.

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