The Hindu Business Line : Dow Jones launches Islamic market India index

Mumbai, Dec. 12 Dow Jones Indexes, a global index provider, announced the launch of its Dow Jones Islamic Market India Index. The new index will measure the performance of stocks traded on the BSE that pass screens for Shari’ah compliance.

The Dow Jones Islamic Market (DJIM) India Index is designed to underlie financial products such as ETFs. The index universe for the DJIM India Index will include all stocks in the Dow Jones Wilshire India Index.

To be included in the DJIM India Index, stocks must pass industry and financial ratio screens for Shari’ah compliance. Excluded are companies that are involved in alcohol, defense/weapons, entertainment, financial services, pork-related products and tobacco.

Also excluded are companies for which the following financial ratios are 33 per cent or more: debt divided by trailing 12-month average market capitalisation; cash plus interest-bearing securities divided by trailing 12-month average market capitalisation; and accounts receivables divided by trailing 12-month average market capitalisation.

The top five components by float-adjusted market capitalisation are Reliance Industries, L&T, Infosys Technologies, Bharti Airtel, and Reliance Communications.

The DJIM India Index is up 44.39 per cent year to date.

The DJIM India Index is weighted by float-adjusted market capitalisation and component weights are capped at 10 per cent.

The index is reviewed quarterly in March, June, September and December.

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