Starting in early February, Thomson Reuters and Australia’s Crescent Wealth are jointly launching Islamic Australia Index – a research-based index that will offer local and international investors a tool to help invest in the Australian market in accordance with Islamic investment principles.
The initiative comes ahead of an expected government proposal to change tax guidelines to help open up the local market for Islamic investment products, though there remains some concern about the market’s growth potential.
Called the Thomson Reuters Crescent Wealth Islamic Australia Index, the measure will cover 143 stocks with combined market capitalisation of $160 billion. The companies are screened to ensure they adhere to sharia law.
Islamic finance prohibits the earning of interest, choosing to focus instead on the buying and selling of tangible assets such as property under the principles outlined within sharia law.Thomson and Crescent Wealth said in a joint statement.
“Creation of the index is a key step toward positioning Australia as an attractive destination for global Islamic investment funds. It is estimated Islamic banking assets globally now exceed $US1 trillion, and that there is $US50 billion in managed funds investing in equities according to Islamic principles.”