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QE Index Developments Press Briefing March, 2012

QE Index Developments Press Briefing March, 2012. www.qe.com.qa. QE Total Return index launch April 1 st , 2012. Description:.

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QE Index Developments Press Briefing March, 2012

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  1. QE Index Developments Press Briefing March, 2012 www.qe.com.qa

  2. QE Total Return index launch April 1st, 2012

  3. Description: QE index measures only price performance of component stocks. Qatar Exchange will calculate a total return version of the index that also reflects income received by way of dividend payments on the 20 stocks. The methodology reinvests the dividends in the index on the day a security is quoted ex dividend (day after the AGM). A total return index represents the total return earned in a portfolio that tracks the underlying price index and reinvests dividend income in the overall index, not in the specific stock paying the dividend.

  4. Factsheet

  5. INDICATIVE QE Index vs QE Total Return Index INDICATIVE

  6. All share index launch date: April 1st, 2012

  7. Description: Qatar Exchange will also offer an ‘all share’ index that covers all listed stocks with share velocity greater than 1%. Velocity is the proportion of total shares that have changed hands in one year. The All Share index will act as an overall benchmark for the market, with over double the number of component stocks versus those included in the QE index. The All Share will also act to support underlying sectors indices. Constituent stocks of the All Share index will be allocated to one of 7 industry sector indices. These indices will provide a framework that allows investors to perform real-time sector analysis.

  8. Factsheet

  9. INDICATIVE All Share Index & Sectors (min velocity 1%) INDICATIVE

  10. All Share Index & Sectors (min velocity 1%) INDICATIVE QE stocks - weighting within respective sector

  11. INDICATIVE All Share Index & Sectors (min velocity 1%) INDICATIVE 35 of the 42 listed companies paid or have dividends in 2011. To highlight the depth of market and yields available, the All Share’s primary calculation method will be total return. Historical data available back to 2007. Existing sectors based upon QE index components to be phased out during 2012

  12. INDICATIVE All Share Index & Sectors (min velocity 1%) – Total Return INDICATIVE All Share & Sector performance Jan 2007 to December 2011. Total Return

  13. METHODOLOGY CHANGES Effective APRIL 1st, 2012

  14. Description: QE index measures the 20 largest and most liquid stocks in the Qatar market. On the first trading day of April and October the index is rebalanced, determining whether existing constituents continue to fulfill index criteria. All listed companies are ranked by giving free float market capitalization a 50% weight (or consideration) and average daily value traded also 50% weight. Companies with velocity less than 5% are excluded from the review, as are companies whereby a single shareholder can only own less than 1% of outstanding shares. The 20 constituents of the QE index for the following 6 months are determined. A 15% cap is applied to an individual constituent’s weight in the index, with the excess weight distributed proportionately among the remaining index constituents.

  15. Methodology Changes: Add following sentence to Article 6.3 - Index Weight Capping – A 15% cap is applied to an individual constituent’s weight in the index, with the excess weight distributed proportionately among the remaining index constituents. In such cases, the fixing of shares figures takes place only at rebalance dates. Amend Article 6.1 of the Index Methodology to read: The index is reconstituted semi-annually on the first trading day of April and October based on a twelve month observation ending last trading day respectively in February and August. Add following sentences to Article 6.2: Selection of constituents – If any number of constituents were to score equally using the two factors described above, then a third factor of annual velocity would be used to choose the qualifying constituents in the index.

  16. Indicative QE Index rebalance – maximum weight of any component capped at 15% INDICATIVE At each review period a components weight is capped at 15%. Any excess weight is distributed proportionately amongst other members. Between review periods weights may fluctuate with price performance. Corporate action ratios are applied to the number of shares established at the review period. Data shown is from Oct 2011 review

  17. Overall effect of 15% cap on QE Index No major impact on the performance of the index Based on a 15% cap applied to scheduled rebalance of 2010 (Sept 30th) the capped QE index finishes 2011 at 8742.6 vs QE Index at 8755.69

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