Dow Jones Asean index to track syariah-compliant equities

 

DOW Jones Indexes, a leading global index provider, has come up with the first index to track syariah-compliant stocks in Southeast Asia.

Launched yesterday, the Dow Jones Islamic Market (DJIM) Asean Index will track the performance of 284 companies in Malaysia, Indonesia, the Philippines, Singapore, Thailand and Vietnam.

The index is designed to underlie financial products such as exchange-traded funds or as a benchmark for actively managed mutual funds.

The top five components in the index, by float-adjusted market capitalisation, are PTT pcl from Thailand, Malaysia's Sime Darby, Singapore Airlines, Singapore Telecommunications and Telekomunikasi Indonesia.

The weighting of Malaysian companies in the index is 27.8 per cent as at November 14.

"We see strong demand for the Dow Jones Islamic Market Asean Index from several market participants," Sumeet Nihalani, Dow Jones Indexes' senior director of sales for Asia Pacific and the Middle-East told Business Times via email.

Malaysia-based Corston-Smith Asset Management has already licensed the index to serve as a basis for a "long-only" corporate governance fund.

"By using the Dow Jones Islamic Market Asean Index as a basis, we ensure meeting core syariah ethical principles," said Shireen Muhiudeen, Corston-Smith's principal fund manager.

The DJIM Asean Index, calculated in US dollars, is reviewed quarterly in March, June, September and December.

There are currently more than 75 licensees with more than US$7 billion (RM25.13 billion) in assets benchmarked to the Dow Jones Islamic Market Indexes.