Dow Jones creates new Islamic market index

"We are extremely proud and excited to serve the growing Islamic investor community” David Moran, president of Dow Jones Indexes said in a press statement from Bahrain.

"Now Islamic and social and ethical investors will be able to make informed decisions on the merits of their present investment portfolios, as investors around the world currently do with the Dow Jones industrial average."

Dow Jones also announced it has issued a licence to Brown Brothers Harriman and Company, a Wall Street private bank and Wafra Investment Advisory Group, a wholly owned subsidiary of Kuwait’s Public Institution for Social Security, to create tradable funds based on the new index.

To ensure that all securities selected for the Dow Jones Islamic Market Index are acceptable under Shari’ah law, a Shari’ah supervisory board of Islamic scholars will advise Dow Jones Indexes.

The members of the board are Justice Muhammad Taqi Usmani of Pakistan, Dr Abdul Sattar Abu-ghuddah of Syria, Dr Mohamed Elgari of Saudi Arabia, Shaikh Nizam Yaquby of Bahrain and Shaikh Talal Delorenzo of the United States. Companies marketing items like alcohol, certain meat products, interest bearing financial services such as banking and insurance and entertainment services like hotels, casinos etc will be excluded from the index as they are not considered suitable for investment under Shari’ah law.

The new Islamic index is one of the 3,000 separate indexes created by Dow Jones Indexes to track stock prices of more than 3,000 companies from 33 countries, 10 world regions and nine market sectors containing 122 industry groups, the statement added.