S&P Dow Jones Indices debuts new Shariah compliant index focusing on the MENA region - IFN

S&P Dow Jones Indices debuts new Shariah compliant index focusing on the MENA region

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GLOBAL: S&P Dow Jones Indices launched its new MENA Bond and Sukuk Indices yesterday, comprising of the S&P MENA Sukuk Index and the S&P MENA Bond Index. The indices assess companies domiciled in 18 countries: Algeria, Bahrain, Egypt, Iran, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Syria, Tunisia, the UAE and Yemen. The Islamic indices are screened for Shariah compliance through an international certification by a recognized Shariah supervisory board. The Sukuk and underlying assets involved will also be warranted as to their compliance with AAOIFI standards for tradable Sukuk and relevant Shariah principles similar to those established by the Dow Jones Islamic Market Indices. Charbel Azzi, the head of the Middle East and Africa for S&P Dow Jones Indices, explained that the new lists seek to provide investors with an "appropriate and timely measure of performance and trends in the Sukuk sector". The S&P MENA Sukuk Index and its sub-indices are market-value-weighted and the securities incorporated therein are required to be US dollar-denominated bonds carrying a maturity of at least one year from the rebalancing date. In terms of the coupon rate, both fixed and floating rate coupon instruments are said to be eligible. The minimum credit ratings allowed for inclusion in the investment grade indices are ''BBB-’/ ‘Baa3’ / ‘BBB’ by S&P, Moody’s or Fitch, respectively.