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LONDON — Standard & Poor's has launched three new Shariah-compliant indices covering the Pan Arab region and publicly traded property companies in developed and emerging markets.
Each Shariah-compliant index provides investors with an investable portfolio while adopting explicit selection criteria defined by Islamic law.
The S&P/Citigroup Global Property Shariah Index represents and measures the investable universe of publicly traded property companies from developed and emerging markets. It has 130 companies from 26 countries with an adjusted market cap of $231 billion. Significant countries represented include the United States (19.54 per cent), Australia (19.19 per cent), China (11.14 per cent), Hong Kong (10.53 per cent) and Japan (9.80 per cent).
Property companies from developed markets
The S&P/Citigroup World Property Shariah Index is a sub-set of the S&P/Citigroup Global Property Shariah Index and includes property companies from the developed markets only. It has 89 companies from 16 countries with an adjusted market cap of $191 billion. Significant countries represented include the United States (23.63 per cent), Australia (23.21 per cent), Hong Kong (12.74 per cent), Japan (11.85 per cent) and France (10.59 per cent).
The S&P Pan Arab Shariah Index includes 129 stocks from listed companies in 11 countries — Bahrain, Egypt, Jordan, Kuwait, Lebanon, Morocco, Oman, Qatar, Saudi Arabia, Tunisia and the United Arab Emirates. Saudi Arabia (48.24 per cent) and Kuwait (20.07 per cent) are the two biggest country constituents, while financials (35.92 per cent), materials (26.67 per cent) and telecom services (19.24 per cent) are the biggest sector constituents. Constituent companies include Al Rajhi Banking & Investment, Saudi Arabian Basic Industries Corporation, and Mobile Telecommunications Company.
"The launch of these three new indices is another important development in the roll-out of our range of fully-investable Shariah-compliant indices," said Alka Banerjee, vice-president of Standard & Poor's Index Services. "We want to provide Shariah-compliant investors with access to important asset classes such as property and real estate, along with key geographical sectors like the Pan Arab region."
All S&P Shariah Indices are screened by Ratings Intelligence Partners, a Kuwait-based consulting company specialising in the Islamic investment market. Ratings Intelligence Partners researchers interface directly with a dedicated Shariah Supervisory Board. The board comprises a group of Islamic scholars whose role is to interpret business issues as well as financial practices and recommend actions in relation to Shariah index management.
S&P Shariah Indices exclude businesses that offer products and services that are considered unacceptable or non-compliant according to Shariah-law, such as advertising and media, alcohol, financials, gambling, pork, pornography, tobacco, and the trading of gold and silver as cash on a deferred basis
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