Dow Jones Indexes, a leading global index provider, today announced the launch of the Dow Jones Islamic Market China/Hong Kong Titans Index, the latest addition to the Dow Jones Islamic Market (DJIM) Index family. The new index tracks 30 of the largest Shari’ah-compliant companies whose primary operations are in mainland China and Hong Kong but trade at the Stock Exchange of Hong Kong Limited.
The DJIM China/Hong Kong Titans Index seeks to measure the largest and most liquid Chinese stocks that comply with Islamic investment principles. The index has been licensed to Hang Seng Bank in Hong Kong to underlie an index fund.
“As the Islamic banking and finance industry continues to expand globally, we maintain our leadership and apply 10 years of indexing expertise to developing the most sophisticated, consistent and representative benchmarks for this market niche. The Dow Jones Islamic Market China/Hong Kong Titans Index offers the best of both worlds— the performance of Shari’ah-compliant stocks and Chinese companies.” said Michael A. Petronella, president of Dow Jones Indexes.
Launched in 1999, the Dow Jones Islamic Market Indexes seeks to measure the global universe of investable equities that pass screens for Shari’ah compliance. The index family includes more than 60 regional, country and industry indexes derived from the flagship Dow Jones Islamic Market World Index. The DJIM Indexes combine Islamic investment principles with Dow Jones Indexes’ objective, transparent and rules-based methodology.
A six-member supervisory board of Islamic scholars also counsels Dow Jones Indexes on the Shari’ah compliance of eligible stocks for the DJIM Indexes.
To be included in the Dow Jones Islamic Market China/Hong Kong Titans Index, stocks must pass industry and financial ratio screens for Shari’ah compliance. Excluded are companies that are involved in alcohol, defense/weapons, entertainment, financial services, pork-related products and tobacco.
Also excluded are companies for which the following financial ratios are 33% or more: debt divided by trailing 12-month average market capitalization; cash plus interest-bearing securities divided by trailing 12-month average market capitalization; and accounts receivables divided by trailing 12-month average market capitalization.
Stocks must have an average float-adjusted market capitalization of HKD 5 million in 12-month daily trading volume to be eligible for inclusion.
Stocks that meet these requirements are ranked first by float-adjusted market capitalization and then by 12-month average daily trading volume using the local currency. A final rank by an equally weighted combination of the free-float market capitalization and trading volume is applied. The top 30 companies are selected as the components for the DJIM China/Hong Kong Titans Index.
The Dow Jones Islamic Market China/Hong Kong Titans Index is weighted by float-adjusted market capitalization and component weights are capped at 15%. The index is reviewed annually in September. Daily history is available back to December 31, 2005.
As of October 9, 2007, the top five components by float-adjusted market capitalization are China Mobile Ltd., CNOOC Ltd., Esprit Holdings Ltd., China Unicom Ltd., Li & Fung Ltd. The DJIM China/Hong Kong Titans Index is up 50.39% year to date.
The index is calculated in real-time in U.S. Dollar (USD) and Hong Kong Dollar (HKD). For more information, please visit www.djindexes.com.