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Standard & Poor's, the world's leading index provider and Tokyo Stock Exchange, Inc., today announced the launch of a new Japan equity index to meet demand from Islamic investors for access to Japanese large-cap companies. The S&P/TOPIX 150 Shariah Index is designed to optimize exposure to leading companies in the leading industries of the Japanese economy.
This new S&P Shariah index currently includes 79 Japan-traded stocks selected from the total S&P/TOPIX 150 universe with respect to each company's compliance with Islamic canonical law. The index will start publishing from December 3rd.
The S&P/TOPIX 150 is the premier investable index for the Japanese equity market and is the Japan component of the S&P Global 1200 index, the first global index to have been calculated real time.
"As Muslim investors around the world increase their exposure to Islamic-compliant global equities, it is natural that Japanese equities find their place in these Shariah allocations. Since Japan represents approximately 10% of the world's market capitalization, Japanese equities, when combined with other major markets, forms a logical core to a Shariah portfolio,"says Bob Shakotko, managing director of Index Services at Standard & Poor's. "The launch of the S&P/TOPIX 150 Shariah completes the global large cap picture when combined with the S&P 500 Shariah, S&P Europe 350 Shariah and S&P Pan Asia Shariah indices launched earlier this year."
"We are very pleased to launch a new Islamic equity index in collaboration with Standard & Poor's based on the S&P/TOPIX 150 . As the demand for Shariah compliant financial products has increased, we are expecting that the index can provide Muslim investors and other investors around the world with a new benchmark, and that this will further enhance the cross-border flow of capital between Japan and many other countries throughout the globe", says Tomoyoshi Uranishi, Senior Executive Officer of Tokyo Stock Exchange, Inc.
All S&P Shariah Indices are screened by Ratings Intelligence Partners, a Kuwait-based consulting company specializing in the Islamic investment market. Ratings Intelligence Partners researchers interface directly with a dedicated Shariah Supervisory Board. The Board is comprised of a group of Islamic scholars whose role is to interpret business issues as well as financial practices and recommend actions in relation to Shariah index management.
S&P Shariah Indices exclude businesses that offer products and services which are considered unacceptable or non-compliant according to Shariah-law, such as advertising and media (newspapers are allowed, sub-industries are analyzed individually), alcohol, financials, gambling, pork, pornography, tobacco, and the trading of gold and silver as cash on a deferred basis. All S&P Shariah Index constituents are monitored on a daily basis to ensure that the indices maintain strict Shariah compliance.
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