The Dhaka Stock Exchange is going to introduce shariah index today without naming the companies which will be under the index. Internationally recognised rating agency Standard & Poor’s developed the model as per two criteria — one is sector-based and another is accounting-based — as per the Islamic shariah, said DSE president Ahasanul Islam while speaking at a press briefing at its office in the city on Sunday.
‘We would not disclose the entire companies name under the index, but institutions and individuals will get the name of the companies by paying certain amount of fees,’ he said.
The name of the index will be ‘DSEX Shariah Index’ and it will encourage banks, financial institutions and individual investors who are not interested to invest in the capital market as they have a perception that the investment in the capital market is not allowed by Islam, Ahasanul said.
‘Inception of a shariah-based index will also encourage foreign investment in our market as most of the countries under the Organisation of Islamic Cooperation have their shariah indices,’ he said.
‘We have already observed that the companies under the shariah index are around 34 per cent of the market capitalisation and these companies are more profitable than the other companies.’
The companies under the bourse’s benchmark index, DSEX, will be eligible for the shariah index. The index will be rebalanced on monthly basis as per the annual reports.
If any company disqualifies for the DSEX, it will be automatically removed from the shariah index.
S&P Dow Jones Indices manager Mahavir Kaswa said, ‘We have conducted two types of screening for modelling — shariah index, sector-based and accounting-based screening.’
‘Companies like advertising, alcohol, cloning, tobacco, pork, pornography, gambling, and trading of gold and silver are disqualified for the index,’ he said.
‘While companies of financial sector except Islamic banking and advertising sector except news channel are excluded from the sector,’ he said.
DSE director Abdul Haque, Ahmad Rashid, Minhaz Mannan Emon and chief executive officer Shawpan Kumar Bala were present, among others, at the news conference.
The DSE on January 28, 2013 introduced two new indices — DSEX and DS30 — on the basis of free-float method developed by the S&P.
-With New Age input
