Islamic Index launched on Australian market
Saturday February 04, 2012 10:13:24 PM,
IINA
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Sydney: Following
last year’s launch of Australia’s first Islamic Australian equity
fund, Thomson Reuters and Crescent Wealth have announced the
launch of a specialised index that will give investors the means
to build an Islamic-compliant Australian equities portfolio.
Crescent Wealth stated that the Thomson Reuters Crescent Wealth
Islamic Australian index is the only such benchmarking tool used
in the Australian market and a key step towards Islamic investment
in Australia, which the investment manager expects will grow to as
much as $13 billion in funds under management by 2019.
“Australian markets are stable and have attractive growth
fundamentals that Islamic investors are looking for in today’s
challenging macro-environment,” said Thomson Reuters global head
of Islamic finance and OIC Countries Rushdi Siddiqui.
The index screens Australian Securities Exchange-listed companies
for compliance with Islamic investment principles and will
initially span 143 securities with a combined market
capitalisation of more than $160 billion.
The index excludes banks, conventional financial stocks and
companies with high levels of debt or leverage.
According to Crescent Wealth, compliant companies are reviewed on
a quarterly basis for continued compliance with the Accounting and
Auditing Organisation for Islamic Financial Institutions
standards.
Crescent Wealth managing director Talal Yassine said that the
index will help to sell the Australian Islamic investment
proposition to investors offshore.
“There is a huge untapped potential to grow Islamic-compliant
investment in Australia from investors here and in Asia and the
Middle East,” he said.
Yassine added that the investment theme of the index has broad
appeal to conventional investors, particularly those with an
‘ultra-ethical’ investment strategy.
He said such investors will be attracted to the index’s weighting
towards low levels of debt and leverage, low account receivables
and the fact that compliant companies invest a greater proportion
of their funds back into the business rather than letting it rest
in cash or short-term investments.
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