The index finished 2006 at 1,636, which means it is up 24% year-to-date. It was launched by FinanceAsia in 2002 at a level of 918, and has more than doubled since its inception five years ago. The index is composed of the 100 most profitable companies in Asia, and is by design a barometer of Asia's financial markets.
Greater China and South Korea explain much of the index's recent gains. The index contains 17 mainland Chinese companies, 16 from Hong Kong, 15 from Taiwan and 24 from South Korea. There are also 10 companies from India.
The index is reconstituted each December, and companies are selected for the index (with the assistance of UBS) by selecting the region's 100 most profitable companies based on three years of aggregate earnings. This methodology is used in order to filter the most successful Asian blue chip firms over what we consider a normal business cycle. The FinanceAsia 100 index is market capitalisation weighted.
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