Author: Gordon Platt
FTSE Group has extended its Global Equity Index Series to include 23 frontier markets, including such countries as Bangladesh, Botswana, Tunisia and Vietnam. “Frontier equity markets today represent more than $1 trillion in capitalization and are becoming attractive investment destinations for a growing number of investors worldwide,” says Mark Makepeace, chief executive of FTSE Group.

The FTSE Frontier 50 index is calculated in real time and can be used as the basis of financial products such as exchange-traded funds, mutual funds and derivatives products.

FTSE offers investors an objective and rules-based means of managing their exposure to new equity markets as they evolve, Makepeace says. FTSE plans to introduce further regional and country indexes for frontier markets in the future.
The countries are screened to make sure they have the size requirements, basic governance and infrastructure required by international institutional investors.

In order for a country to be eligible for inclusion in the new index, it must have a formal and independent stock market authority and no restrictions on repatriation of capital and income. There are also transparency, clearing and settlement requirements, as well as a minimum country free-float size of $750 million.
Gordon Platt