BAKU (Azerbaijan), 24 Rabi al-Thani/17 March (IINA)-The unified stock index of the Organization of Islamic Cooperation (OIC) will facilitate the development of the financial sector. It will allow the Muslim companies to more actively operate on stock trading. As it is known, the constraints imposed by Sharia law, in fact, excluded many companies from the Muslim countries from the financial business sector.
OIC member-countries intensified the operations to create a single stock index. The Department for OIC affairs under the Turkish Development Ministry, which is one of the most active participants in this process, indicated that the work on the establishment of an Islamic stock index has been conducted for five years. There is growing interest in this process among many Islamic countries.
The index on the common direction and speed of the stock price of companies adhering to the Sharia in their activity is main objective of the new stock index. The index will be used to evaluate the group of stock and subsequent evaluation of global processes in the securities market of Muslim countries.
It should be stressed that there are local equity indices, especially for Muslims at stock exchanges around the world. A certain number of companies whose activities do not run counter to Sharia are used for their calculation. The exchanges did this to attract Muslim investors in the stock market.
Roughly 11 countries are participants of the project to create a unified Islamic exchange index within OIC. A decision about the participation of Saudi Arabia, Malaysia and Indonesia is expected to be made soon. Strengthening of the cooperation between stock exchanges of the OIC member countries will be the main goal of this project.
The project creators said despite the fact that only companies working on the basis of Islamic law will be involved in the index, investors from all over the world can invest in the index.
Therefore, this new index will serve both domestic and international investors wishing to invest transparently and in accordance with Sharia. In the medium term prospect, it will promote the wide spread of Islamic banking worldwide and assist issuers in creating the structured investment products, in accordance with the requirements of the global Islamic market.
(InternatonalIslamicNewAgency / 19 March 2012)
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