To attract more Islamic investments, the Dubai Fiancial Market (DFM), has launched a Shariah Index - DFMSI, which provides market participants with a benchmark to measure the performance of Shariah-compliant listed securities.

DFM is the first Shariah-compliant exchange globally since 2007 and this new initiative adds to its efforts to align with Dubai's vision to become the capital of Islamic economies globally.

The initial market capitalisation of the Shariah Index has been set as per stock prices on 31 December 2009 with 1,000 points as the base point of the Index. It can be accessed via DFM's website and mobile apps.

Currently, the DFM Shariah Index consists of 40 listed companies split between30 UAE companies and 10 dually-listed companies and the weightage of any company is capped at 10 percent.

Essa Kazim, Chairman of DFM said: “The Index enables Shariah-complaint investors and international institutions a trajectory of the historical and current performance of DFM’s Shari’a-complaint shares compared to other Islamic or conventional indices at the local, regional and international levels.”

“We believe that the DFM Shari’a Index is a strong push to our efforts to further attract Islamic investments, considering the growing demand from investors across the world for ethical investments that focus on companies adhering to the Islamic Sharia’ or to any other general values related to sustainability and environment protection,” Kazim added.

According to a statement from DFM, shares included in the DFM Shariah Index are designated in line with the quarterly updated list of Shariah-compliant companies prepared by the DFM Fatwa and Shariah Supervisory Board, which revises the list based on the quarterly financial results of listed companies.

The board implements the revisions in line with DFM’s Standard for Issuing, Acquiring and Trading of Shares issued in 2008 and its amendments issued in 2018.

(Writing by Seban Scaria seban.scaria@refinitiv.com, editing by Anoop Menon)

Our Standards: The Thomson Reuters Trust Principles

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© ZAWYA 2019