Nasdaq (Nasdaq:NDAQ), along with Veles Water and WestWater Research, announced the launch of the Nasdaq Veles California Water Index (NQH2O), the first of its kind water index that benchmarks the price of water in a way that supports price discovery and enables the creation of a tradable financial instrument.
While existing water indexes track companies active in the extraction and delivery of water, the Nasdaq Veles California Water Index sets a weekly rate for the price of water in California, enabling important price discovery and the launch of financial instruments. The index is calculated weekly, using a proprietary water index methodology developed by Nasdaq and Veles Water.
Key points on the Nasdaq Veles California Water Index:
- value is based on the volume-weighted average of the prevailing prices in five specific California water markets
- prices adjusted for market-specific pricing factors specific to each of the eligible markets and transactions
- pricing algorithm provides a benchmark price for water transactions across California.
"Water is our most important commodity and until now, there were no financial risk management instruments available in the global financial markets. We see the Nasdaq Veles California Water Index as an important first step to understanding water as a commodity, which means a more transparent and accessible marketplace for all," said Lance Coogan, CEO of Veles Water. "Our collaboration with Nasdaq and WestWater Research will yield meaningful results for the entire financial ecosystem."
"The Nasdaq Veles California Water Index is the first published price index with an indication of market scarcity," said Clay Landry, Managing Director, WestWater Research. "Having this index is a great step forward for the public markets and for using the power of the marketplace to better understand water as a commodity."
Dave Gedeon, Vice President and Head of Research and Product Development for Nasdaq's Global Indexes, added, "This index will bring transparency to this market and help drive a better outcome for water market participants through verifiable price discovery. The Nasdaq Veles California Water Index can bring dramatic change to the way we quantify and value an important resource."
About Veles Water:
Veles is a water pricing specialist, involved primarily in water valuation methodologies. The company specializes in the conceptualization, creation and development of bespoke financial instruments, whose unique pricing formulae contribute to bring transparency and liquidity to the global water market. To learn more, visit www.veleswater.com.
About WestWater Research:
WestWater Research ("WestWater") is the leading economic and financial consulting firm specializing in water rights and water resource acquisition and development throughout the United States. With a national practice, WestWater provides transaction advisory, market intelligence, and asset management services relating to water resources. The firm has advised on over $800 million in water transactions that include several creative public-private partnerships that have been recognized as "Global Water Deal of the Year." To learn more, visit www.waterexchange.com.