Shanthy Nambiar, Bloomberg
Bangkok: Standard & Poor’s is introducing a new Islamic index for companies in China, India, Brazil and Russia to tap growing demand for Islamic investment products.
The S&P BRIC Shariah index will include stocks compliant with Islamic law, or Shariah, that trade on developed market exchanges including Hong Kong, London and New York stock exchanges and Nasdaq, the rating firm said in an e-mail today.
“Each of the constituents within the S&P BRIC Index is liquid and completely hedge-able,” said Alka Banerjee, vice president of S&P’s Index Services. Investors can create “mutual funds and structured products,” from the index, he said.
Shariah bans the payment of interest and prohibits investment in tobacco, alcohol and gambling businesses.
The rating firm in April started Islamic indexes for six countries in the Persian Gulf, including Kuwait and Saudi Arabia. Demand for Shariah-compliant products is increasing as rising oil prices boost wealth in the Persian Gulf.