Dow Jones Indexes launched the Dow Jones Islamic Market ASEAN Index on Monday, the first index to cover Shari’ah-compliant companies in six of the 10 member states of the Association of Southeast Asian Nations (ASEAN): Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
The DJIM ASEAN Index will serve as the basis for exchange-traded funds and other investment products. Islamic nations in the Middle East and in Southeast Asia are ramping up efforts to develop their local ETF marketplaces.
Indonesia, Malaysia, Thailand and Singapore, four of the six countries covered by the new index, have already taken baby steps into ETF waters.
At the end of the third quarter, Singapore had five ETFs; Malaysia had three, Thailand had two, and Indonesia had one ETF portfolio, according to Barclays Global Investors’ ETF Research and Implementation Strategy Team.
Among the four SE Asian nation’s nascent ETF markets, there was a total of less than $1.5 billion invested in the ETFs, BGI data indicated.
iShares has a series of Shari’ah-compliant ETFs for the U.K., based on MSCI benchmarks. Deutsche Bank’s x-trackers ETF family also listed in July three ETFs based on Standard & Poor’s Shari’ah indexes, adding to its existing Dow Jones Islamic Market Titans 100 Index ETF.
The only licensee so far for the DJIM ASEAN is by a traditional equity fund manager, Malaysia-based Corston-Smith Asset Management.
The DJIM ASEAN Index is weighted by free-float market capitalization and includes 284 components. The top five components by float-adjusted market capitalization are Thailand-based oil and gas company PTT PCL; Malaysian industrial goods and services company Sime Darby; Singapore Airlines; Singapore Telecommunications; and Indonesia telecommunications firm Telekomunikasi Indonesia. The index is calculated in U.S. dollars and reviewed quarterly.
There are currently more than 75 investment product licensees with more than $7 billion in assets benchmarked to the Dow Jones Islamic Market Indexes.
Source : indexunivese