File photo shows participants at a joint Good Corporate Governance Symposium in Riyadh last year. The Swedish Minister of Trade Dr. Ewa Bjorling and Dr. Abdulrahman Al Tuiwaijri, Governor of the Capital Market Authority, inaugurated the event. JEDDAH: Saudi Arabia has the highest country weighting in the new corporate governance index with 30.3 percent and the UAE ranked second with 14.7 percent, the Standard and Poor's new stock index aimed at boosting corporate governance in the Gulf Arab markets revealed. Saudi food company Savola and Egyptian mobile operator Mobinil 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 index provider 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 HASPI index includes 50 companies with representations from nine different countries and has a combined market capitalization of $176 billion. Its constituents vary widely from that of S&P's Pan Arab Composite Index, a widely-tracked index by the region's fund managers. SABIC is the top constituent of the Pan Arab index with a 6.1 percent weight followed by lender Al Rajhi Bank which has a 5.9 percent allocation. The Pan Arab index returned 18.2 percent in 2009 compared with 27.4 percent for the HASPI index. In 2010, both the indices rose 15.3 percent. S&P plans to help launch the Gulf Arab region's second exchange-traded fund (ETF) in collaboration with several local providers, it said in November.
