Thomson Reuters is on the brink of giving Australia its first Islamic index.
Starting in early February, Thomson Reuters and Australia’s Crescent Wealth are jointly launching Islamic Australia Index — a research-based index that will offer local and international investors a tool to help invest in accordance with Islamic investment principles in the local market.
The initiative comes ahead of an expected government proposal to change tax guidelines to help open up the local market for Islamic investment products, though there remains some concern about the market’s growth potential.
Called the Thomson Reuters Crescent Wealth Islamic Australia Index, the measure will cover 143 stocks with combined market capitalization of 160 billion Australian dollars (US$168 billion). The companies are screened to ensure they adhere to Sharia law. Islamic finance prohibits the earning of interest, choosing to focus instead on the buying and selling of tangible assets such as property under the principles outlined within Sharia law.
“Creation of the index is a key step toward positioning Australia as an attractive destination for global Islamic investment funds. It is estimated Islamic banking assets globally now exceed US$1 trillion, and that there is US$50 billion in managed funds investing in equities according to Islamic principles,” said the firms in a joint statement.
source: The Wall street Journal