The Bombay Stock Exchange Ltd (BSE) and Taqwaa Advisory and Shariah Investment Solutions (TASIS) will launch the BSE TASIS Shariah 50 index from Monday, December 27.
The Index will be the first Shariah Index created in India utilising the strict guidelines and local expertise of a domestic, the India-based Shariah advisory board.
The BSE TASIS Shariah 50 index consists of the 50 largest and most liquid Shariah compliant stocks within the BSE 500, an exchange release said here.
The creation of the index will help promote financial inclusion of the Muslim population in India and attract investment flows from international funds that must adhere to Shariah norms.
"The introduction of the BSE TASIS SHARIAH 50 Index will give Islamic and other socially-responsible investors another means to access the Indian market and will help attract pools of capital to India from the Gulf, Europe, and Southeast Asia," BSE MD & CEO, Madhu Kannan said.
This index will create increased awareness on financial investments amongst the masses and help enhance financial inclusion.
The index will also build a base for licensing for the construction of Shariah compliant financial products, including mutual funds, ETFs, and structured products, Kannan said.
TASIS employs a strict, proprietary screening process utilising their knowledge of and local access to listed Indian companies to ensure that all stocks included within the BSE TASIS Shariah 50 are strictly compliant with Islamic Shariah law.
TASIS has adopted financial screening norms that are more conservative than its peers, making the product ideal for Islamic investors seeking investments that adhere to the strict, conservative Shariah compliance norms.
According to Shariq Nisar Director, Research & Operations, TASIS, "Bombay Stock Exchange has the largest number of listed Shariah compliant stocks in the world. All Muslim countries of the Middle East and Pakistan put together do not have as many listed Shariah compliant stocks as are available on BSE."
The BSE TASIS Shariah 50 employs index constituent weight capping.
Index constituent weights are capped at 8 per cent at rebalancing, in an effort to increase the diversification within the index and ensure greater compliance with international regulatory and statutory investment guidelines, the release said.
