Standard & Poor’s has launched three new indices designed to meet demand from Islamic investors for investable access to some of the world’s most popular investment strategies.
The three indices launched on Oct 30 were S&P Global Infrastructure Syariah, S&P Global Healthcare Syariah, and S&P/IFCI Large-MidCap Syariah.
“Muslim investors around the world have growing appetite for investable sector and thematic solutions that have been screened for syariah compliance,” said Standard & Poor’s vice president of index services Alka Banerjee.
“The launch of these three global indices is another example of Standard & Poor’s commitment to meeting the increasingly sophisticated needs of Muslim investors,” he said in a statement released in New York.
The S&P Global Infrastructure Syariah Index provides liquid and tradable exposure to 20 companies from around the world that represent the listed infrastructure universe while adopting explicit selection criteria defined by Islamic law. The universe is drawn from the S&P Global Infrastructure Index, and has three distinct infrastructure clusters: energy, transportation, and utilities.
The S&P Global Healthcare Syariah is comprised of companies in the S&P 500, S&P Europe 350, and S&P Japan 500 syariah-compliant indices sit in the GICS Health Care sector. As of Sept 30, 2007, there are 72 companies in the index with an adjusted market capitalisation of US$2.1 trillion (RM7.14 trillion).
The S&P/IFCI Large-MidCap Syariah index, Standard & Poor’s emerging market syariah index, currently includes stocks from the following emerging market countries: Argentina, Brazil, Chile, China, the Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Malaysia, Mexico, Morocco, Peru, the Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailand and Turkey.
The syariah index is a subset of the S&P/IFCI Composite Index, and includes 90% of the market capitalisation of the parent S&P/IFCI Composite Index. Also launched on Oct 30 were five Arab syariah country indices: Egypt, Jordan, Lebanon, Morocco, and Tunisia. These underlying country indices are part of the S&P/IFCG emerging market series. The stocks listed in each underlying country are individually screened for syariah compliance before inclusion in the Pan Arab Syariah Index.
All S&P Syariah 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 Syariah Supervisory Board. The board comprises of Islamic scholars whose role is to interpret business issues as well as financial practices and recommend actions in relation to syariah index management.
S&P Syariah Indices exclude businesses that offer products and services which are considered unacceptable or non-compliant according to syariah law, such as advertising and media (newspapers are allowed, subindustries are analysed individually), alcohol, financials, gambling, pork, pornography, tobacco, and the trading of gold and silver as cash on a deferred basis.