Cronus Capital Markets (CCM) and the International Securities Exchange have jointly developed the alternative energy industry equity index, the ISE-CCM Alternative Energy Index. It began trading January 10, 2006, under the symbol POW on the ISE.
The index provides investors exposure to companies involved in solar, wind, geothermal, hydrogen/fuel cells, hydropower, and nuclear fusion.
CCM is a leading research and consulting firm for the alternative energy sector and ISE is the largest equity options exchange in the world.
Michael Soni, CCM’s CEO, believes the index is a necessary development for the still nascent sector. “As a result of the ISE-CCM Alternative Energy Index, the alternative energy sector can now officially be considered a sector within the capital markets. Investors will have a direct avenue in which to track and participate in the growth of this new and important sector. Furthermore, investors will be able to hedge their portfolios against the risk of rising fossil fuel prices in a manner never before available.”
ISE, the world’s largest equity options exchange, was founded on the principle that technology fosters and infuses new efficiencies and operational innovations into securities trading. After developing an innovative market structure that integrated auction market principles into an advanced screen-based trading system, ISE launched the first fully electronic US options exchange in May 2000. www.iseoptions.com
In other news, a global clean energy index, The WilderHill Clean Energy Global Innovation Index, is launching on AMEX next week under the symbol NEX. It includes 86 renewable energy companies from 18 countries.
The index includes companies in wind and solar energy; biofuels, biomass, marine, geothermal energy; hydrogen and fuel cells; power storage; generation efficiency and smart distribution; energy-saving technologies; and related services and suppliers. To be in the index, companies must have market caps of at least $150 million and trading volumes high enough to be accepted on the American Stock Exchange.
Another criterion for inclusion was how closely a company’s stock price reflects its clean-energy activities. General Electric and BP weren’t included, for example, because even though GE is a major player in wind energy as BP is in solar, that side of the business doesn’t compare in size to the rest of the companies’ activities, and therefore doesn’t impact stock price. About half the stocks in the index have over 50% of their value associated with clean energy.
They made an exception for some companies though. Sharp – in a similar position to GE and BP in terms of the share of renewable energy in its overall business – was admitted because it is the largest solar manufacturer in the world.
An ETF will most likely enter the market soon which will enable investors to purchase shares that track the index. The new index follows last year’s launch of the WilderHill Clean Energy Index (ECO) which consists of U.S. -based clean-energy stocks.
“If you want to capture major clean-energy transactions, you’ve got to look beyond U.S. shores,” said founder Rob Wilder. “Clean energy is really a global phenomenon, and people can now follow this index to see how well global clean energy is doing.”
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