Silk Road Management has launched the Silk Road Australia Index (SILKAU), a debut benchmark that includes largest Mongolia and Central Asia-focused companies with listing on the Australian Stock Exchange (ASX). The index currently covers 10 companies with the total market capitalisation of USD1.2 billion (31 December, 2011) and is set with initial value of 1000 as of 1 January, 2012.
Alisher Ali, Managing Partner, Silk Road Management says: "We believe that the Silk Road Australia index with albeit modest US$1.2 billion market capitalization is expected to expand significantly in coming years on the back of upcoming IPOs of Mongolia focused resource companies on the ASX and accelerated acquisitions in the mining sector in Mongolia by existing ASX-listed companies".
Similarly, the Silk Road Hong Kong Index more than tripled to US$12 billion in market capitalisation at end-2010 from USD3.4 billion at the beginning of the same year due to three IPOs of Mongolian resources companies on the Hong Kong Stock Exchange – Mongolian Mining Corp, SouthGobi Energy and Winsway Coking Coal Holdings.
The Silk Road Australia Index, the Australian dollar and market capitalisation – based gauge, tracks the share price performance of the Australian-listed companies with assets and operations in Mongolia and other resource-rich frontier Silk Road countries. Such resource companies are increasingly considering the Australian bourse as an attractive market to raise capital due to the resilience of the Australian equities market despite continued global volatility.
"We anticipate that Australian institutional and retail investors will seek exposure to new resource markets in the Silk Road region after witnessing massive success of the mining sector in Australia", says Ali.