JP Morgan, BNP Paribas launch indices

Investment banks JP Morgan and BNP Paribas have launched rival indices aimed at helping institutional investors in dollar-denominated markets make long-term investments in the commodities sector.

Standard & Poor's GSCI and the Dow Jones-AIG, the most active commodities indices, only allow short-term investments. The new indices will help investors take exposure up to three years ahead.

With launch of the new indices, the investment banks are venturing into the fast-growing global commodity market. S&P forecasts that investment into commodities indices to jump 20 per cent in 2008 to reach close to $160 billion.

BNP Paribas's Commodity Market Representative Index launched Friday includes a weighted basket of futures where the weightings are calculated on the basis of open interests, the company said.

The index, which currently contains a broad range of commodities with 25 constituents including energy and metals.