The S&P Select Frontier Index comprises 30 of the largest and most liquid companies from countries with smaller economies or less developed capital markets than traditional emerging markets, and as a result, have previously been excluded from most emerging market benchmarks and investment funds.

Alka Banerjee, vice president of Standard & Poor''s Index Services, says the S&P Select Frontier Index is designed to meet the needs of increasingly sophisticated investors seeking to create index-linked products for frontier markets, which have the potential for similar or greater returns than other better known developed and emerging markets.

The S&P Select Frontier Index is a subset of the benchmark S&P Extended Frontier 150 Index.

"Liquidity has increased tremendously in frontier markets since 2001 as restrictions on foreign investment have been relaxed and returns have outpaced both developed and emerging markets over the last decade," Banerjee says. "Less correlated to global economic cycles than their more developed counterparts, the combination of accelerating economic growth, increased government focus on privatisations and heightened IPO activity provides an attractive investment environment for those seeking alpha and diversification benefits."

The universe from which index candidates are drawn includes publicly listed companies from 11 markets in the Standard & Poor''s Emerging Market Data Base (EMDB) that are generally accessible to foreign investors but are excluded from the S&P/IFCI Emerging Markets Index. At launch, the S&P Select Frontier Index includes companies from Bulgaria, Cambodia, Colombia, Jordan, Kazakhstan, Pakistan, Panama, United Arab Emirates and Vietnam.

The biggest country weightings include:
" Pakistan: 28.97%
" UAE: 23.12%
" Jordan: 13.23%
" Vietnam: 11.54% and
" Panama: 7.74 %
The top three constituents are MCB Bank in Pakistan, Emaar Properties in the UAE and Copa Holdings in Panama.

To be eligible for inclusion in the S&P Select Frontier index, a company must have a minimum float-adjusted market capitalization of $100 million, a minimum average daily value traded of $2 million and a minimum of 15 days traded over the previous six months. Constituent weights are driven by liquidity and size.

Standard & Poor''s also released today a white paper titled Frontier Markets: Investment Rationale, Accessibility and Risks.