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Bursa Malaysia Berhad (Bursa Malaysia), in collaboration with FTSE Group (FTSE) the global index provider, today launched the FTSE Bursa Malaysia EMAS Shariah index designed to provide investors with a broad benchmark for Shariah-compliant investment for the Malaysian market. The index takes the constituents of the FTSE Bursa Malaysia EMAS Index, which has been free float weighted and liquidity screened, and overlays the Securities Commission’s Shariah Advisory Council’s (SAC) screening methodology to derive a highly investable and transparent Shariah-compliant index.
The new index will run parallel with the existing Shariah index (KLSI) for nine months. The KLSI will be deactivated on 1 November 2007, making the FTSE-Bursa Malaysia EMAS Shariah Index the singular benchmark index for Malaysian Shariah-compliant investments.
Bursa Malaysia’s Chief Executive Officer, Dato’ Yusli Mohamed Yusoff said, “The new index provides investors with a clearer picture of quality Shariah investments in the Malaysian market. It uses globally-adjusted criteria that make it easier for institutional investors to track our Shariah-compliant investment offerings more effectively. This is critical to ensure our Shariah market continues maintaining its competitiveness with other international Shariah investment destinations.”
He added that the new index also represents a first step towards the creation of more Islamic products. “With the new FTSE Bursa Malaysia EMAS Shariah Index, we can now work on creating a tradable Shariah index which in turn allows us to introduce Islamic structured products.”
Mr Paul Hoff, Managing Director of FTSE Asia Pacific said “The FTSE Bursa Malaysia EMAS Shariah Index is a superior Shariah-compliant benchmark for the Malaysian market due to its investability, liquidity and transparent ground rules. This overlaid with SAC’s screening methodology is expected to attract domestic and foreign Shariah investors alike.”
The screening methodology applied by the SAC stipulates that stocks must not be involved in activities deemed non-permissible according to Shariah. Constituents from the FTSE Bursa Malaysia EMAS Index, a composite of the large and mid-cap stocks of the FTSE Bursa Malaysia 100 and the FTSE Bursa Malaysia Small Cap Index, which do not meet the SAC’s Shariah standards are excluded. The result, the FTSE Bursa Malaysia EMAS Shariah Index, will be managed according to a transparent and public set of rules and overseen by an independent committee who will meet semi-annually to review the index.
For the complete list of constituents, go to www.ftse.com while the index performance information is available at www.bursamalaysia.com.
About FTSE Group
FTSE Group is a world-leader in the creation and management of indexes. With offices in Beijing, London, Frankfurt, Hong Kong, Madrid, Paris, New York, San Francisco, Boston, Shanghai and Tokyo, FTSE Group services clients in 77 countries worldwide. It calculates and manages the FTSE Global Equity Index Series, which includes world-recognized indexes ranging from the FTSE All-World Index, the FTSE4Good series and the FTSEurofirst Index series, as well as domestic indexes such as the prestigious FTSE 100. The company has collaborative arrangements with the Athens, AMEX, Cyprus, Euronext, Johannesburg London, Madrid, NASDAQ, Thailand and Taiwan exchanges, as well as Nomura Securities, Hang Seng and Xinhua Finance of China. FTSE also has a collaborative agreement with Dow Jones Indexes to develop a single sector classification system for global investors.
FTSE indexes are used extensively by investors world-wide for investment analysis, performance measurement, asset allocation, portfolio hedging and for creating a wide range of index tracking funds. Independent committees of senior fund managers, derivatives experts, actuaries and other experienced practitioners review all changes to the indexes to ensure that they are made objectively and without bias. Real-time FTSE indexes are calculated on systems managed by Reuters. Prices and FX rates used are supplied by Reuters.
About Bursa Malaysia
Bursa Malaysia Berhad is a public company limited by shares under the Companies Act 1965. Bursa Malaysia is an approved exchange holding company under Section 11D of the Securities Industry Act 1983. Other companies in the Bursa Malaysia Bhd Group of companies include a stock exchange, a derivatives exchange, an off-shore international financial exchange, equity and derivatives clearing houses, a central depository, an information services provider and an Information Technology services provider.
Bursa Malaysia Securities Berhad, a wholly-owned subsidiary of Bursa Malaysia Berhad, is an approved stock exchange under Section 8 of the Securities Industry Act 1983.
