FTSE Group and Bursa Malaysia launch tradable Shariah compliant index for Malaysian market
KUALA LUMPUR, HONG KONG, LONDON, 21 May 2007: Bursa Malaysia Berhad (Bursa Malaysia) and the global index provider, FTSE Group, today launched the FTSE Bursa Malaysia Hijrah Shariah Index, a tradable Shariah-compliant index covering the Malaysian equity market. The new index is expected to attract a pool of global investors and can be structured to be used for Shariah-compliant investment products such as Exchange Traded Funds (ETFs).
With the size of Islamic equity funds estimated at more than US$5 billion (Source: Malaysian ICM, August 2006) and more than 250 global Islamic financial institutions with estimated combined assets in excess of US$230 billion, Bursa Malaysia is positioning itself as a destination for the global Islamic investment dollars with the launch of this new tradable index. This new index is in response to the investment needs of global customers and is crucial in enhancing Malaysia’s potential to become a world leading Islamic financial hub. Designed using FTSE’s global indexing standards, the FTSE Bursa Malaysia Hijrah Shariah Index is an internationally accepted benchmark which will increase the Malaysian Islamic capital market’s competitiveness.
Chua Kong Khai, Head of Information Services for Bursa Malaysia said, “There is a growing appetite worldwide for Islamic financial products. As part of our continued commitment to offer a wide range of investment opportunities for investors globally, the FTSE Bursa Malaysia Hijrah Shariah Index will provide yet another avenue in tapping the fast-growing Islamic funds. More importantly, the availability of such Shariah-compliant index would contribute to the development of more Islamic financial products in Malaysia. This would add to the range of products available to global investors, including the Middle East, who are keen on Shariah-compliant investments in Asian markets.”
FTSE Group’s globally recognised methodology standards – including free float adjustment and liquidity screening – are employed in this new Shariah index, with the stringent screening criteria of both the Malaysia Securities Commission’s Shariah Advisory Council (SAC) and Yasaar Ltd, the leading global Shariah consultancy. This collaborative screening process and a fixed number of 30 constituents makes the FTSE Bursa Malaysia Hijrah Shariah Index a highly investable, liquid and transparent index for international investors. Moreover, the triple screening process works well with a wider range of global investors who are looking for an alternative investment philosophy such as Shariah-compliant investment.
Paul Hoff, Managing Director of FTSE Asia Pacific said, “FTSE Group again brings its globally recognised indexing expertise to the table by partnering with Bursa Malaysia to give international investors a highly investable, transparent and liquid tradable index for Shariah-compliant Malaysian equities. We look forward to structured investment products being launched in the future to give more choice to universal investors.”
Constituents in the FTSE Bursa Malaysia Hijrah Shariah Index are required to meet principles set out by the SAC and Yasaar Ltd to ensure they are not involved in the core activities such as alcohol, tobacco and gaming as well as very stringent financial criteria. More information on the screening principles of SAC and Yasaar Ltd can be found at http://www.sc.com.my and http://www.yasaar.org respectively.
The FTSE Bursa Malaysia Hijrah Shariah Index comprises companies in the FTSE Bursa Malaysia EMAS Index that meet the international screening requirements for Shariah investors and is one of two Shariah-compliant indices in the FTSE Bursa Malaysia Series, the other being the FTSE Bursa Malaysia EMAS Shariah Index, a broad based benchmark which is screened in accordance to the SAC’s screening methodology.
FOR MORE INFORMATION PLEASE CONTACT:
Meredith Blakemore, FTSE Asia Pacific, Tel: +852 2230 5801 Email: firstname.lastname@example.org
Sandra Steel, FTSE London, Tel: +44 (0) 20 7866 8987 Email: email@example.com
If you are not a member of the press, please contact your local Client Services team.
Geeta Balakrishnan, Tel: +603 2034 7374 Email: GeetaBalakrishnan@bursamalaysia.com
Delyana Nordin, Tel: +603 2034 7161, Email: firstname.lastname@example.org
NOTES TO EDITORS:
*Note: Hijrah means migration. The Hijrah refers to the Prophet’s migration from Mecca to Madinah. This journey took place in the twelfth year of his mission (622 C.E.). This is the beginning of the Muslim calendar. The word hijrah means to leave a place to seek sanctuary or freedom from persecution or freedom of religion or any other purpose. Hijrah can also mean to leave a bad way of life for a good or more righteous way.
About FTSE Group
FTSE Group is a world-leader in the creation and management of indexes. With offices in Beijing, London, Frankfurt, Hong Kong, Madrid, Paris, New York, San Francisco, Boston, Shanghai and Tokyo, FTSE Group services clients in 77 countries worldwide. It calculates and manages the FTSE Global Equity Index Series, which includes world-recognized indexes ranging from the FTSE All-World Index, the FTSE4Good series and the FTSEurofirst Index series, as well as domestic indexes such as the prestigious FTSE 100. The company has collaborative arrangements with the Athens, AMEX, Cyprus, Euronext, Johannesburg London, Madrid, NASDAQ and Taiwan exchanges, as well as Nomura Securities, Hang Seng and Xinhua Finance of China. FTSE also has a collaborative agreement with Dow Jones Indexes to develop a single sector classification system for global investors.
FTSE indexes are used extensively by investors world-wide for investment analysis, performance measurement, asset allocation, portfolio hedging and for creating a wide range of index tracking funds. Independent committees of senior fund managers, derivatives experts, actuaries and other experienced practitioners review all changes to the indexes to ensure that they are made objectively and without bias. Real-time FTSE indexes are calculated on systems managed by Reuters. Prices and FX rates used are supplied by Reuters.
About Bursa Malaysia
Bursa Malaysia Berhad is a public company limited by shares under the Companies Act 1965. Bursa Malaysia is an approved exchange holding company under Section 11D of the Securities Industry Act 1983. Other companies in the Bursa Malaysia Bhd Group of companies include a stock exchange, a derivatives exchange, an off-shore international financial exchange, equity and derivatives clearing houses, a central depository, an information services provider and an Information Technology services provider.
Bursa Malaysia Securities Berhad, a wholly-owned subsidiary of Bursa Malaysia Berhad, is an approved stock exchange under Section 8 of the Securities Industry Act 1983.