The Markit iTraxx SovX CEEMEA (Central and East European, Middle East and Africa) index will start trading on January 20. The index is part of the Markit iTraxx SovX family of sovereign credit default swap indexes.

The index will track investor perception of emerging market sovereign credit risk and provide market participants with a standardised tool to hedge or gain exposure to the risk of 15 countries in Central and Eastern Europe, Middle East and Africa.

The 15 countries represented in the index have a combined total outstanding credit default swaps (CDS) notional of $530bn. The Markit iTraxx SovX CEEMEA is a basket of 15 sovereign CDS of Turkey; Russia; Hungary; South Africa; Kazakhstan; Poland; Bulgaria; Romania; Croatia; Czech Republic; Latvia; Qatar; Abu Dhabi; Ukraine and Lithuania. Constituent weightings will be determined by polling market makers.

Markit launched the Markit iTraxx SovX indexes in July 2009 to monitor the sovereign CDS market and gain access to the asset class on a regional and global basis. The first of the indexes indices to be traded was the Markit iTraxx SovX Western Europe index.

"The sovereign CDS asset class continues to gain in importance amid growing concern over countries' debt levels," commented Stephan Flagel, managing director and head of indexes at Markit. "We expect this new tradable index will increase transparency and liquidity in the CEEMEA sovereign credit markets."