A joint venture between Islamic investment manager, Crescent Wealth, and international business informational provider, Thomson Reuters, has launched the country’s first research-based Islamic index for the Australian market.

 

The index will screen ASX-listed companies for compliance with Islamic investment principles, allowing investors to build compliant portfolios.

 

Screening filters used by the new index exclude banks and conventional financial stocks, companies with high levels of debt or leverage such as property trusts, and other stocks that conflict with Islamic principles. The index produces a dynamic bias towards resources and energy firms, and includes blue-chip stocks BHP Billiton and Rio Tinto.

 

The move is considered crucial to attracting international Islamic investors, with Islamic banking assets globally now exceeding US$1 trillion.

 

Rushdi Siddiqui, Global Head of Islamic Finance and OIC Countries at Thomson Reuters, said: “Australian markets are stable and have attractive growth fundamentals that Islamic investors are looking for in today’s challenging macro-environment. Using the well-documented and objective Shariah screening process, the new co-branded index will highlight these investment opportunities across our terminals by necessarily focusing on many highly-regarded compliant companies with low levels of balance-sheet debt.  It is a powerful new tool for Islamic investors to geographically diversify their portfolios while increasing investment opportunities into an important G-20 country like Australia.”

 

Managing Director of Crescent Wealth, Talal Yassine, said the new index was a natural fit for Crescent Wealth, as Australia’s first purely Islamic-focused fund manager.

 

“There is a huge untapped potential to grow Islamic-compliant investment in Australia from investors here and in Asia and the Middle East. This index gives these investors a local performance benchmark for the Australian market, and will help companies like Crescent sell the Australian Islamic investment proposition to investors offshore,” Mr Yassine said.