FTSE International and Reuters are aiming to provide a single comparative global classification of n...
FTSE International and Reuters are aiming to provide a single comparative global classification of nearly 35,000 companies within the next 12 months.
The two are now putting together teams to classify Reuters' database of equities using the FTSE Global Classification System but spokesmen from the two companies differ in their estimates of when the classification will be completed.
Steven Vale, policy and communications manager at FTSE International, believes it could be available in as little as six months but Herbie Skeete, spokesman for Reuters, said it was unlikely to be completed until the end of the year.
One thing that both partners do agree on is that the market wants a one-stop classification shop to make it easier for investors to allocate and manage assets on a global basis.
Vale said: "Nobody is providing a global standard at the moment. What you find is that people use different classification systems and when they want to compare stocks across sectors they don't have any one consistent tool. Having all the companies in the one system enables investors to compare banks in Brazil and Japan on the same basis."
He said the classification will be "highly granular," organising companies into small homogenous subsectors. Those subsectors will be organised into sectors and those sectors will be organised into larger industry groupings. Vale added that the partners will cooperate to monitor changes to ensure that shifts in market focus are accurately represented.
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