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JSE launches Shariah investments index

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JSE launches Shariah investments index

by BuaNews Online
21 Jul 2008
BuaNews Online
BuaNews Online

The JSE Securities Exchange, in partnership with the FTSE Group, has launched the FTSE/JSE Shariah Top 40 Index, which will open up many opportunities for those interested in Shariah compliant investment.

This will include the 850 000-strong South African Muslim community, reports

The FTSE/JSE Shariah Top 40 Index is a selection of Shariah compliant companies from the FTSE/JSE Shariah All-Share Index, with the calculation of the index and the treatment of corporate actions being similar to the FTSE/JSE Top 40.

"Internationally the market for Islamic investment products is growing exponentially, at an estimated 15 to 20 percent per annum," said JSE Information Product Sales Senior General Manager Ana Forssman in a company statement.

"This index gives Muslim investors access to the top performing listed companies in South Africa without compromising religious beliefs."

The FTSE/JSE Shariah Top 40 Index is suitable for the creation of financial products, such as index funds, warrants, certificates and Exchange Traded Funds.

"With approximately 1.5 billion Muslims worldwide, there is huge growth potential for investment vehicles with a faith-based mandate," said FTSE Group Europe, Middle East and Africa Managing Director Imogen Dillon Hatcher, adding that Shariah compliant investments were one of the fastest growing new areas of finance globally.

"The FTSE/JSE Shariah Top 40 index will provide institutional investors with an accurate Shariah benchmark as well as help providers create structured investment products tailored to the Islamic market," she said.

"Today's launch demonstrates FTSE Group's commitment to providing innovative solutions to investors both in South Africa and worldwide."

The constituents of the FTSE/JSE Shariah Top 40 Index are screened by Yasaar Research, a well-respected authority on Shariah law.

To qualify as a constituent of the index, companies undergo a detailed screening process, which filters out any organisations considered unacceptable or non-compliant according to Shariah-law.

This can include businesses involved in conventional finance, alcohol, pork-related and non-halaal food, entertainment, tobacco and weapons.

The remaining companies are then further screened according to Shariah compliant financial criteria. In order to remain in the index, the companies are reassessed by Yasaar quarterly. - BuaNews

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