Companies involved in alcohol, tobacco, pork, financial services, arms, entertainment won't be included.
By THE MEDIA LINE NEWS AGENCYPublished: AUGUST 18, 2009 18:34Advertisement
Dow Jones Indexes is set to launch four new indexes for the Middle East and North Africa region, giving investors access to both conventional and Shari'a compliant indexes.
Dow Jones Indexes, best known for the Dow Jones Industrial Average, is launching the Dow Jones GCC Index, covering the Gulf Cooperation Council (GCC) countries: Kuwait, Saudi Arabia, Qatar, Bahrain, Oman and the United Arab Emirates.
The company is also launching a Dow Jones GCC Islamic Market Index.
"Dow Jones Indexes is expecting to see great interest in these new indexes," Andrea Weidemann, a spokesperson for Dow Jones Indexes, told The Media Line. "They are the first indexes on the market which include real-time data of the Saudi stock market."
In order to be listed on an Islamic Market Index, the company must comply with Shari'a, Islamic law.
Companies involved in alcohol, tobacco, pork-related products, financial services, defense/weapons or entertainment will not be included on the index.
The decision as to which companies follow Shari'a will be made by Tadawul, which operates the Saudi stock exchange. Saudi Arabia observes a strict form of Sunni Islam called Wahhabism, more conservative than the Islam practiced in neighboring Gulf countries such as the UAE.
"Dow Jones Indexes calculates and publishes more than 100 Shari'ah compliant regional, country and industry indexes, which shows how much the interest in and demand for the Dow Jones Islamic Market Indexes has grown over the years." Weidemann said.
Saudi Arabia is considered the largest and strongest economy in the Gulf, due largely to its huge oil reserves. The country's economic dominance was confirmed by a June decision by GCC member states to locate the headquarters for a future central bank in the Saudi capital Riyadh. The establishment of a common central bank is seen by GCC nations as a precondition to establishing a common regional currency.
Real gross domestic production in Saudi Arabia is expected to increase by three percent in 2010 according to the Saudi National Commercial Bank's annual report released on Tuesday. The prediction is based largely on a recovery in global demand and higher oil production.
The report also predicts that the high level of government investment in non-oil related sectors will remain a key factor for economic growth.
Saudi Arabia is the world's largest oil producer with an estimated daily production of 10 million barrels.
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