Dow Jones Indexes, a leading global index provider, has announced that it will expand its Dow Jones Islamic Market Index series by adding the Dow Jones -RHB Islamic Malaysia Index. The new index, using Dow Jones Islamic Market methodology, will include Shari’ah-compliant equities traded at Bursa Malaysia. The Dow Jones-RHB Islamic Malaysia Index, which is scheduled to be launched in June 2005, will be developed jointly by Dow Jones Indexes and RHB Research Institute - an established licensed investment adviser in Malaysia with a proven track record in equities research.
"The index was developed in cooperation with RHB Research Institute to meet
the growing demand for compliant equity indexes, and is based on internationally acknowledged Islamic finance standards,” said Lars Hamich, managing director of STOXX Ltd., the joint venture responsible for Dow Jones Indexes’ business development in Europe, Asia and the Middle East. “We are confident this Islamic index will be the bridge for Gulf, Europe and U.S. Shari’ah-compliant equity investors seeking compliant opportunities in Malaysia and the rest of Asia.”
He continued, “The Dow Jones-RHB Islamic Malaysia Index will now allow investors to access a transparent, investable, Islamic-compliant universe of companies - with a rules-based index concept - and a methodology consistent with all indexes in our global and integrated Dow Jones Islamic Market family.
The index concept is approved by our Shari’ah board, of which the leading Malaysian scholar - Dr. Daud Bakar - is a member.” The executive chairman of RHB Capital, Dato Sri Sulaiman Abdul Rahman Taib, said that the establishment of the new Islamic index with Dow Jones bodes well for the development of the Islamic financial and capital market. “This also marks another milestone in our efforts to enhance Islamic financial services to the investing community,” he added.
RHB Research Institute is part of RHB Capital Group, a major financial-services group in Malaysia that provides both conventional and Islamic financial products and services in Malaysia as well as in Singapore, Thailand and Brunei. RHB Capital Group intends to offer new Islamic products and services based on the new Islamic index later this year.
Once it is launched, the new Islamic Index will replace the existing RHB Islamic Index - the first Malaysian Islamic index - established in May 1996. The Dow Jones-RHB Islamic Malaysia Index is designed to underlie investment products such as collective investment schemes, exchange-traded funds, structured products and derivatives targeted to Islamic investors world-wide.
The Dow Jones-RHB Islamic Malaysia Index follows a rules-based index methodology consistent with the Dow Jones Islamic Market Indexes. Excluded
from the indexes are stocks that represent the following lines of business: alcohol, tobacco, pork-related products, financial services, defense/weapons and entertainment. Also excluded are companies whose total debt dividend by trailing 12-month average market capitalization is greater than or equal to 33%, and those whose cash plus interest-bearing securities divided by trailing 12-month average market capitalization is greater than or equal to 33%. Additionally, companies whose accounts receivables divided by total assets is greater than or equal to 45% are excluded.
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