S&P Pan Arab Composite: What It Measures and How It Is Built

Direct Answer

The S&P Pan Arab Composite is a rule-based measurement of broad market index covering all eligible equities across Pan-Arab markets, maintained by S&P Dow Jones Indices. Like every index it owns nothing: it is a number produced by applying a published weighting formula to a selected list of companies, revised on a schedule the provider sets.

What this index covers

The S&P Pan Arab Composite covers broad market index covering all eligible equities across Pan-Arab markets, within the Middle East market. S&P Dow Jones Indices defines which securities are eligible, how they are selected from that pool, and how much each one contributes to the published number.

The index name does not state a fixed company count, so the number of constituents follows the eligibility rules rather than a target.

How constituents are weighted

Float-adjusted market capitalization weighted, using float factors that reflect only investors resident in the GCC region. Because that availability is typically larger than for foreigners, a company can be too small for the Investable version yet large enough to join the Composite.

The weighting method is the single biggest driver of how an index behaves. Two indexes covering the same market can diverge for years purely because they weight differently, which is why comparing index levels without knowing the method tells you very little.

What qualifies for inclusion

Companies in the Pan Arab markets covered by S&P (Bahrain, Egypt, Jordan, Kuwait, Morocco, Oman, Qatar, Saudi Arabia, Tunisia and the UAE) that meet the S&P Global BMI or S&P Frontier BMI criteria for their country. The Composite includes Saudi Arabia because the kingdom permits investment from residents of the GCC region.

Eligibility rules are the part of an index most readers never look at and the part that decides what it can possibly measure. A screen that excludes a whole sector, or admits only one listing venue, shapes the result far more than any day of trading does.

When the membership is revised

Follows the parent BMI reconstitutions: emerging markets use a reference date at the close of the last business day of July and take effect on the Monday after the third Friday of September, while frontier markets use a January reference date and take effect on the Monday after the third Friday of March. IPOs are added quarterly on a reference date five weeks earlier.

Reconstitution is the one date an index changes shape by design rather than by price. Funds tracking it have to trade toward the new membership, which is why the schedule matters to anyone holding the tracker rather than only to the provider.

The rule that surprises people

The methodology builds the GCC Domestic index first and uses it as the universe, then applies different float factors for Composite and Investable. A company can therefore be a member of one version and not the other.

References

• S&P Dow Jones Indices: S&P Dow Jones Indices: S&P Pan Arab Indices Methodology, as published 2021. Every rule described on this page is taken from this document.

Current S&P Pan Arab Composite constituents

S&P Dow Jones Indices publishes and licenses the S&P Pan Arab Composite constituent list. Swoopr does not republish it here. The provider's own page is the authoritative source for current membership and weights.

S&P Dow Jones Indices: official S&P Pan Arab Composite page

Related reading

• All stock market indexes: how indexes are built, weighted and revised.
• Emerging Markets indexes: others covering the same region.
• Index concentration: measuring how much of an index sits in its largest holdings.
• Index rebalancing and inclusion effects: what happens to a stock when index membership changes.

Frequently Asked Questions