The Dubai Financial Market is a stock exchange located in Dubai, United Arab Emirates. It was founded on 26th March 2000. Dubai Financial Market General (DFMG) Index is a free-float market capitalization weighted price index comprising stocks of listed companies in the Dubai Stock Market. The base value of the index is 1000 as on 1st January 2004.
The index is calculated using the Weighted Average Market Capitalization methodology where the price multiplied by the free float gives the market capitalization of its constituents. The weightage of each company is arrived at by dividing the market capitalization of each company with the total market capitalization of all the companies. The larger the market weightage of the company the larger is the impact due to 1% change in its price on the index.
The DFMG index represents those companies that are listed at DFM as a principal Market. Companies that are listed at DFM as bye market (Dual Listing) are not considered for DFMG index. The DFMG index is calculated in real-time and published during the hours of trading. The base Currency for the DFMG index is UAE dirham.
Weight of any company represented in the index is decided according to the number of free float shares with the exclusion of the government ownership and major stockholdings that are 5% and above. The percentage of free float shares included in the index is limited to only 20% of the less traded stocks.
The criterias that select the most traded stocks listed in the index are as follows:-
- The total trade value of the company shares should not be less than 1% of the total trade value of DFM during the evaluation period (six months), or 10% of the company’s market capitalization (Velocity) at the end of the evaluation period.
- The company shares should be traded on 50% of the total trade days throughout the evaluation period.
- Total number of transactions on the company shares should not be less than 150 transactions.
- The trade volume should not be less than 500,000 shares throughout the evaluation period.
- The total trade value should not be less than AED 100 million throughout the evaluation period.
Market Capitalization of any of the companies included in the index should not exceed 20% of the total index’s market capitalization. New listing is considered for the Index after one month of the first trading date.
The DFMG Index has given a return of 88.44% on a year on year basis and 46.21% from year to date. Emaar company has the highest weightage of 18.08% in the index followed by Dubai Islamic Bank with a weightage of 12.66%, Emirates with 10.2%, DU (Emirates Integrated Telecommunications Technology) with 7.86% and Dubai Internet City at 6.24% while others have less than 6% weightage each in the index.