The battle for selling stock market index licenses is heating up with the collaboration of FTSE Grou...
The battle for selling stock market index licenses is heating up with the collaboration of FTSE Group and Dow Jones indices as they seek to take on MSCI.
The joint Industry Classification Benchmark (ICB) will cover corporate bonds and more than 50,000 equities worldwide. It takes part of both the existing FTSE Global Classification System and the Dow Jones Global Classification Standard.
Some of the world"s stock exchanges, including the Nasdaq and the New York Stock Exchange in the US; the London Stock Exchange; Euronext and SWX Swiss Exchange in Europe; and the JSE in South Africa, are current users of the FTSE and Dow Jones indices systems, and therefore are likely to convert to the ICB, according to the FTSE.
Other users of the current systems are index providers Hang Seng, Russell and Stoxx, in addition to media including the Financial Times, The Wall Street Journal, CNBC, SmartMoney Magazine and Dow Jones Newswires.
The ICB will supply a measure of returns at sector level: 10 Industries help investors monitor broad industry trends, 18 Supersectors can be used for trading, while 39 Sectors and 104 Subsectors allow more detailed analysis. The ICB is due to be implemented by the end of 2004, with data available by June.
Gareth Parker, head of index design at FTSE, says the main reason for the merger was to take on the MSCI, which has about $3,500bn of funds benchmarked to it, compared with the $3,000bn under FTSE licenses and the $1,000bn with DJ.
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