The Bombay Stock Exchange (BSE) is set to launch its Shariah index comprising 50 stocks selected from the BSE-500 bracket. The index, to be launched next week, has been structured in partnership with Taqwaa Advisory Shariah Investment Solutions, says a news report in Economic Times.
According to the report, infrastructure, capital goods, IT, telecom and pharmaceuticals shares will form a large chunk of the BSE Tasis Shariah-50 Index – the name Shariah index will be known by. But no stock will have more than an 8% weightage. The stock screening has been done by Taqwaa Advisory (Tasis) scholar board, and the index construction, by BSE, Asia’s oldest stock exchange.
With the Shariah index, BSE can attract investors from Gulf and European countries also, who do not invest in stocks of companies dealing in alcohol, cinemas and hotels, tobacco, pork meat etc.
“The BSE is more popular among overseas investors. The new index will attract investments from Arab and European countries, where Shariah funds are already popular,” Zafar Sareshwala, CMD, Parsoli Corporation, a company having expertise in Islamic finance, has been quoted as saying by the paper.
source: Two circles