The National - Abu Dhabi’s Yahsat to be included in MSCI’s global small cap indexes

Vijay Valecha, Special to The National November 14, 2021

Al Yah Satellite Communications, better known as Yahsat, will be included in global index services provider Morgan Stanley Capital International’s small cap indexes from December 1 this year as it looks to diversify its investor base.

The UAE company, which is listed on the Abu Dhabi Securities Exchange, has been added to the MSCI All Country World Index Small Cap Index, the MSCI Emerging Markets Small Cap Index and the MSCI UAE Small Cap Index after fulfilling the necessary listing requirements, the company said on Sunday.

The MSCI indexes are tracked by funds with billions of dollars worth of assets. The small cap segment of the MSCI indexes tends to capture more local economic and sector characteristics relative to larger emerging market capitalisation segments, according to MSCI.

“Yahsat’s inclusion in three MSCI indices serves as a testament to the group’s position as a local industrial champion and a key contributor to the development and diversification of the UAE economy,” said Yahsat group chief executive Ali Al Hashemi.

“This development is expected to further strengthen Abu Dhabi’s position as an attractive destination for investors.”

The company, a unit of Mubadala Investment Company, raised about $731 million through its initial public offering in July.

It sold 975.9 million shares, or 40 per cent of equity, through the IPO, which was several times oversubscribed, with significant demand from both qualified institutional and retail investors in the UAE, Yahsat said at the time.

The company reported revenue worth $284m for the nine-month period through to the end of September.

“This achievement is a reflection of Yahsat’s proven operational and financial strength and underpins our ongoing commitment to generating shareholder value by investing in next-generation technologies and expanding our geographical footprint," Mr Al Hashemi said.

“This is an important milestone that will allow us to further diversify our investor base and pave the way for increased recognition internationally.”

Founded in 2007, the satellite operator offers multi-mission satellite services in more than 150 countries across Africa, Asia, Australasia, Europe, the Middle East and South America.

It has a current fleet of five satellites that cover more than 80 per cent of the world’s population. A sixth satellite is expected to be launched in the second half of 2023 and begin commercial operations 12 months later.

Yahsat joins a number of other Abu Dhabi companies that are part of the MSCI's global indexes. In May, Abu Dhabi-based food and beverage company Agthia and the UAE’s largest fuel retailer, Adnoc Distribution, were included in the MSCI’s Small Cap Emerging Markets index and the MSCI Emerging Markets index, respectively.

"MSCI indices are tracked globally by major market players and any addition of a particular stock to the index results in heavy liquidity and volume pick-up for the stock," Vijay Valecha, chief investment officer at Century Financial, said in an earlier interview.

"A majority of global passive funds invest based on constituents available as a part of the MSCI and other popular index baskets."