The NIC 50 is a market capitalization weighted index which tracks the 50 most traded companies by value listed on Boursa Kuwait. The NIC 50 began on Dec. 31, 1996 with a base of 1,000.
To be used as a tool to benchmark the performance of equity portfolios such as investment funds in the Kuwait Stock Market.
NIC devised and developed the NIC 50 index to provide a more realistic picture of the performance of the Kuwait Stock Market during any given trading day throughout the year. NIC identified that the market indices, both Price and Market weighted, did not present an accurate reflection of the market movement/performance to investors due to the following:
NIC 50 selects the 50 most traded stocks by value and then weights them according to their market capitalization. This process is done quarterly on a year-on-year basis to determine which stocks fit the criteria, with amendments made accordingly. A report listing the components of the index and any additions or deletions are reported in selected daily Kuwaiti newspapers on a quarterly basis.
The NIC 50 index takes into account the price, liquidity and market capitalization of stocks listed on Boursa Kuwait thus presenting a more insightful and true picture of performance levels to investors.
Illiquid stocks are eliminated and significant price movements of small cap stocks have a reduced effect on overall market levels.
The NIC 50 index, on average, represents approximately 70-75% of the market capitalization of the Boursa Kuwait.