Although possibly not the most exciting segment of the Islamic financial market, Shariah compliant indexes have had an active start to the year; amid a setting where news flow is usually set at a trickle.
Dow Jones Indexes (DJI) has announced that it will no longer produce its weekly Dow Jones Islamic Indexes reports, raising questions whether this will mark the provider’s exit from the market for Islamic indexes. The move is sure to raise eyebrows, given Dow Jones’ early entry in the market back in 1999 and its position as a frontrunner in the market – IFN itself has awarded it with Best Islamic Index Provider for five years running since 2007.
Especially odd is that DJI’s decision comes at a time when its competitors are powering on. Players such as Ideal Ratings, a partner of the Redmoney Indexes, continue to remain active, having just teamed up with WestLB for the German bank’s launch of its Islamic Strategy Index Certificate.
Additionally, Australian Islamic investment manager Crescent Wealth has launched an Islamic index for its home market, partnering with Thomson Reuters. In a further development of the market, Egypt’s government, largely anticipated to establish an Islamic economy, has announced its intention to set up an index of companies complying with Shariah.
DJI’s move also belies the activity of equity markets this year. According to S&P, global equity markets gained US$1.8 trillion in January alone, cutting the US$3 trillion loss seen in 2011 by 60% in one month.
With the market seemingly in a healthy position, is DJI seeing something we’re not or is its pullback a signal of its proposed merger with S&P; which may result in a merger of their services, or perhaps other internal issues?
source: Islamic Finance News