Just got an interesting press release (I can’t quite believe I just wrote those words) from index provider Dow Jones Indexes, announcing the launch of the Dow Jones Islamic Market Greater China Index. It’s probably safe to assume that Malaysia and Indonesia are the main targets for the index, though given the increasingly important links between China and the Middle East (see RBS Chief China Economist Ben Simpfendorfer‘s website for more), there will no doubt be some Middle Eastern interest in tracking Shari’ah-compliant Chinese companies. The index includes companies traded on the Hong Kong Stock Exchange and the Taiwan Stock Exchange, as well as some Chinese companies listed on US exchanges.
A few points from the press release:
Excluded are companies engaged in the following lines of business: alcohol, tobacco, pork-related products, financial services, defense/weapons and entertainment. Also excluded are companies for which the following financial ratios are 33% or more: debt divided by trailing 12-month average market capitalization; cash plus interest-bearing securities divided by trailing 12-month average market capitalization; and accounts receivables divided by trailing 12-month average market capitalization.
The Dow Jones Islamic Market Greater China Index comprises 290 components as of October 22, 2009. The top five components of the index are China Mobile Ltd. (Telecommunications, China), China Unicom (Hong Kong) Ltd. (Telecommunications, China), CNOOC Ltd. (Oil & Gas, China), Hon Hai Precision Industry Co. Ltd. (Industrial Goods & Services, Taiwan), and Taiwan Semiconductor Manufacturing Co. Ltd. (Technology, Taiwan) as of October 22, 2009.