PowerShares registered on Monday to launch an ETF that will invest in companies domiciled in 10 Middle Eastern and North African countries. The ETF, which is provisionally being called the "PowerShares MENA Frontier Countries Portfolio", will track an as-yet-unnamed index that will hold "approximately 50 companies" the majority of whose assets reside within the following countries--Nigeria, Egypt, Morocco, Oman, Lebanon, Jordan, Kuwait, Bahrain, Qatar and United Arab Emirates.

The index will weight stocks by free-float adjusted market-cap. No word on country allocations, though the prospectus indicates that no country's weight can exceed 20% of the index and the index will hold no more than five stocks from a single country (hence the 'approximately 50 companies', I guess). To qualify for inclusion in the index, each stock must have "at least $500 million in float-adjusted market capitalization and a minimum average daily value traded of $1 million for the period of six months prior to inclusion". One country that is conspicuous by its absence from the index is Saudi Arabia, which appears not to have made the cut.

Nevertheless, the fund is remarkable insofar as it would be the first ETF to target these regions specifically. While there are a few ETFs, such as SPDR S&P Emerging Middle East and Africa, that focus on portions of the African continent and the Middle East, they tend to tread heavily in more-developed countries like Israel and S. Africa. This fund, by contrast, provides exposure to a host of oil rich, if less-established, markets.

With this filing, PowerShares joins Claymore in the race to list the first "frontier" ETF on a U.S. exchange. Though the forthcoming Claymore ETF, which is also in registration, will invest in a wider swath of countries than the PowerShares fund, it'll hardly be a stranger to the Middle East and African continents, as its index sweeps in names in Bahrain, Jordan, Kuwait, Lebanon, Oman, Qatar, United Arab Emirates, Egypt, Ghana, Kenya, Malawi, Mauritius, Morocco, Nigeria, Tunisia, and Zimbabwe. However, only Egpyt (27% weighting as of Jan. 31, 2008), Bahrain (4.7% weighting), and Lebanon (4.5% weighting) figured prominently in that index. Thus, the PowerShares ETF would ostensibly be unique in providing dedicated exposure to the so-called "MENA" (Middle East and North Africa) countries.