SPDJI unveils new Shariah dividend index for high-yielding stocks in the GCC - IFN

SPDJI unveils new Shariah dividend index for high-yielding stocks in the GCC

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GLOBAL: S&P Dow Jones Indices (SPDJI) has launched the S&P GCC Composite Shariah Dividend Index, an index designed to measure the performance of the highest yielding Shariah compliant stocks from the GCC region. All stocks listed are required to meet respective liquidity, dividend growth, and dividend sustainability criteria. The birth of the new index is attributed to the mounting interest from Islamic GCC investors. Michael Orzano, the associate director of global equity indices at SPDJI, said: “Dividend indices have been very popular given the low interest rate environment. The S&P GCC Composite Shariah Dividend Index was developed based on feedback from Islamic GCC investors who are looking for equity income while remaining Shariah compliant.” The S&P GCC Composite Shariah Dividend Index is drawn from the S&P GCC Composite Shariah Index, which offers investors a comprehensive Shariah compliant benchmark by measuring the float defined by foreign investment limits applicable to GCC residents (which is typically larger than that available to investors based outside the region). Subject to a minimum of two stocks per country, the S&P GCC Composite Shariah Dividend Index is comprised of the 30 highest yielding stocks from the six GCC Arab states: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. The index constituents are weighted by their indicated annual dividend yield. As at the 22nd January 2014, the index comprise of stocks from the business sectors such as materials (31.7%), financials (16.5%), industrials (13.1%), telecommunication services (9.5%), consumer discretionary (8.5%), utilities (5.7%), consumer staples (5.5%), healthcare (4.6%) and energy (4.5%).