Скачать презентацию Issues Suggestions for OIC Shari ah Compliant Indexes Скачать презентацию Issues Suggestions for OIC Shari ah Compliant Indexes

e320cb653d314285f21fb481af341272.ppt

  • Количество слайдов: 36

Issues & Suggestions for OIC Shari’ah Compliant Indexes Rushdi Siddiqui rushdi. siddiqui@dowjones. com Global Issues & Suggestions for OIC Shari’ah Compliant Indexes Rushdi Siddiqui rushdi. siddiqui@dowjones. com Global Director Dow Jones Islamic Market Index Group © Copyright 2007 Dow Jones and Company, Inc.

Presentation Overview § Are the various Islamic Funds assisting and promoting OIC Countries economic Presentation Overview § Are the various Islamic Funds assisting and promoting OIC Countries economic and capital market development at: § Member Country Level § Intra-OIC Portfolio Investments § Liquidity on Stock Exchanges § Transparency & Governance Listed Firms § Deyaar, Tamweel, Nakheel, etc. § Regional/OIC Level § Viewed as a common market § OIC Global Level § Foundational, not Transactional, Infrastructure Paradigm © Copyright 2007 Dow Jones and Company, Inc. 2

Dow Jones Indexes Timeline: Key Dates § § § § 10/6/97 -Cash options on Dow Jones Indexes Timeline: Key Dates § § § § 10/6/97 -Cash options on DJIA begin trading on CBOE 2/26/98 -Dow Jones STOXX Indexes launch 2/5/99 -Dow Jones-AIG Commodity Index launch 2/9/99 -Dow Jones Islamic Market Indexes launch 7/14/99 -Dow Jones Global Titans Index launch 9/7/99 -Dow Jones Sustainability Group Indexes launch 2/14/00 -Dow Jones U. S. Total Market Index launch 2/18/03 -Dow Jones Indexes Islamic Blue-Chip Indexes launch 11/3/03 -Dow Jones Select Dividend Index launch 11/30/05 -Dow Jones Wilshire U. S. Industry Indexes launch 1/23/06 -Dow Jones Islamic Market Sustainability Index launch 3/6/06 -Announced launch of Dow Jones Citigroup Sukuk Index 5/31/06 -Dow Jones Islamic market China Offshore Index launch 6/7/06 -Dow Jones BRIC 50 Index launch © Copyright 2007 Dow Jones and Company, Inc. 3

Dow Jones Islamic Market Index Awards § § § § Best Shariah Compliant Index Dow Jones Islamic Market Index Awards § § § § Best Shariah Compliant Index Provider (Global Finance Magazine, US, 2008) Global Recognition in Islamic Finance for a Finance Institution (Dubai, IIFF 2008) Best Islamic Index Provider (Euromoney, London, 2008) Best Islamic Index Provider (Islamic Finance News, Malaysia, 2007) Best Islamic Index Provider (Terrapin, Singapore)- 2007 Best Individual Contribution to Islamic Finance (Kuala Lumpur Islamic Finance Forum (KLIFF), Malaysia, 2007) American Muslim Achievement Award, Islamic Center of Southern California, USA (2006) Sh. Mohmmad Rashid Bin Makhtoum Award for Contribution by Western Institution to Islamic Finance (2006) Contribution to Islamic Capital Market Development, International Islamic Finance Forum, Singapore, 2006. Failka Award for Contribution & Development to Islamic Funds (2006) Deloitte/KLIFF Award for Special Contribution to Islamic Finance (2005) CERT (Malaysia) Award for Excellence in Islamic Finance (2004) Sh. Mohmmad Rashid Bin Makhtoum Award for Innovation in Islamic Finance (2003) © Copyright 2007 Dow Jones and Company, Inc. 4

Where are we coming from? 2001 -2010 Structured Sukuk Mega Project Finance Mega Commercial Where are we coming from? 2001 -2010 Structured Sukuk Mega Project Finance Mega Commercial Banks 1991 -2000 Hard Asset Private Equity Fund Management Islamic Indexes 1975 -1990 Commercial Banking Syndications Islamic Conglomerates Market exposure: 100 m Market exposure: 20 m Concentrations of Islamic Banks growing in GCC, Malaysia, Pakistan and Bangladesh Market Exposure: 250 m Conversions, Islamic Windows & Subsidiaries of Mega Banks, Establishment of significant Islamic Banks in Non-Muslim states Muslim populated states getting interested Syria, Libya, Soviet bloc Onset of Islamic Banks (Malaysia, UAE, etc. ) Inefficient Command SOEs in Iran and Sudan, and Pakistan Source: S. Farooq, BIBF Timeline 1975 -2010 © Copyright 2007 Dow Jones and Company, Inc. 5 5

We are moving forward in IF VC PE Activities Risk Reward M L R We are moving forward in IF VC PE Activities Risk Reward M L R S E -Petro-liquidity & HNWs -Diversification -Shariah Scholars/research -Stress Tested/Time -Cross Sell IFPs CFPs IFI CFIs IF CF 300 plus years Timeline/Products/Returns © Copyright 2007 Dow Jones and Company, Inc. 6

Hypothetical “Islamic Investor & Asset Manager” Dilemma? § Increased Volatility: § Exclusion of prohibited Hypothetical “Islamic Investor & Asset Manager” Dilemma? § Increased Volatility: § Exclusion of prohibited industries that may be the current high-fliers § Exclusion of financial sector § Exclusion of highly leveraged firms § Exclusion of companies with high non-operating interest income § Bias: Technology, Healthcare & Energy § Quarterly Reviews (turnover) © Copyright 2007 Dow Jones and Company, Inc. 7

First Islamic Funds Fund Name Fund Manager Location Inception Dana Al-Aiman Mara Unit Trust First Islamic Funds Fund Name Fund Manager Location Inception Dana Al-Aiman Mara Unit Trust Malaysia May-68 Tabung Amanah Bakti Malaysia May-71 Amana Income Fund Saturna Capital USA Jun-86 Mendaki Growth Fund Mendaki Holdings Pte. Ltd. Singapore May-91 Futuregrowth Al. Baraka South Africa Jun-92 Al Rajhi Local Share Al Rajhi Banking & Invest. Saudi Arabia Jul-92 Saudi Arabia Jan-93 Al. Ahli US Trading Equity National Commercial Bank Source: Failaka © Copyright 2007 Dow Jones and Company, Inc. 8

Growth in Assets in Equity Funds Source: Failaka © Copyright 2007 Dow Jones and Growth in Assets in Equity Funds Source: Failaka © Copyright 2007 Dow Jones and Company, Inc. 9

Growth in the Number of Islamic Equity Funds (excluding Asia) Source: Failaka © Copyright Growth in the Number of Islamic Equity Funds (excluding Asia) Source: Failaka © Copyright 2007 Dow Jones and Company, Inc. 10

As regards Equity Funds Total Number of Islamic Equity Funds: 306 Source: Failaka © As regards Equity Funds Total Number of Islamic Equity Funds: 306 Source: Failaka © Copyright 2007 Dow Jones and Company, Inc. 11

Nearly Full Range of Products Fund categories Global Equity 27 available Asian Equity 7 Nearly Full Range of Products Fund categories Global Equity 27 available Asian Equity 7 by non-Asian based managers US Equity 12 available European Equity 7 available Emerging Market 19 available (BRIC, South Africa, Turkey) Single Country (SABB Amanah Saudi Equity) Small Company (Al-Rajhi Global Small Cap Equity) Regional Funds (45 funds dealing in GCC Equities) Sector Funds 9 available Balanced Easy to duplicate and 17 available Hedge Fund 6 -7 nearly there; 2 operational Source: Failaka © Copyright 2007 Dow Jones and Company, Inc. 12

Its all Relative Total Mutual Funds in the World: 56, 863 Total Islamic: 550 Its all Relative Total Mutual Funds in the World: 56, 863 Total Islamic: 550 Total Islamic Equity: 320 (including balanced) Total Socially Responsible (SRI): 201 Source: Failaka © Copyright 2007 Dow Jones and Company, Inc. 13

Assets Under Management: In Perspective Total Assets invested in Mutual Funds: US$ 17. 8 Assets Under Management: In Perspective Total Assets invested in Mutual Funds: US$ 17. 8 Trillion Total Assets in SRI Mutual Funds: US$ 179 Billion Total Assets in Islamic Equity Funds: US $ 17. 3 Billion (est. ) Source: Failaka © Copyright 2007 Dow Jones and Company, Inc. 14

DJIM Screens § DJIM Shariah Supervisory Board v Outsourcing Shariah § Primary Business § DJIM Screens § DJIM Shariah Supervisory Board v Outsourcing Shariah § Primary Business § Negative Screens ~ Socially Responsible Investing § Positive Screens: DJIM Sustainability Index § Revenue Accountability § Financial Screens § Debt/MC <33% § Cash + IBS/MC <33% § Acc Rec/MC <33% § Debt Screen Impact: § Enron (Deleted: 3 Q’ 01), Worldcom (2 Q’ 01), Tyco (1 Q’ 02) & Global Crossings (2 Q’ 01) § AAOIFI Standard (21): Product Standard § DJ Citi. Group Sukuk Index: Standard Product § Price Only, Market Cap & Free Float Weighted Indexes § Price, Equal, MC and Fundamental Indexes § Low Debt/Non-Financial Social-Ethical Index Alpha Strategy © Copyright 2007 Dow Jones and Company, Inc. 15

Screening Process Dow Jones World Business Descrip!ion Revenue Three Financial Ratios 95% D/MC DJIM Screening Process Dow Jones World Business Descrip!ion Revenue Three Financial Ratios 95% D/MC DJIM C+IB/MC AR/MC © Copyright 2007 Dow Jones and Company, Inc. 16

DJIM Screening DJIM Universe Financial ratios Impermissible Income Primary Business © Copyright 2007 Dow DJIM Screening DJIM Universe Financial ratios Impermissible Income Primary Business © Copyright 2007 Dow Jones and Company, Inc. 17

DJIM Regional Breakdown (2007) UK © Copyright 2007 Dow Jones and Company, Inc. Cana DJIM Regional Breakdown (2007) UK © Copyright 2007 Dow Jones and Company, Inc. Cana Indonesia 18

DJIM Sector Breakdown (2007) Credit & Impact on Financial Tech © Copyright 2007 Dow DJIM Sector Breakdown (2007) Credit & Impact on Financial Tech © Copyright 2007 Dow Jones and Company, Inc. Indust Financial 19

DJIM Performance (2007) © Copyright 2007 Dow Jones and Company, Inc. 20 DJIM Performance (2007) © Copyright 2007 Dow Jones and Company, Inc. 20

Compliant Sector Based Investing Islamic Equity Indexes Benchmark Indexes: Dow Jones Islamic Market Index Compliant Sector Based Investing Islamic Equity Indexes Benchmark Indexes: Dow Jones Islamic Market Index ($17 T) © Copyright 2007 Dow Jones and Company, Inc. Industrials Utilities Health Care Basic Matls Financials Telecom Cons Svcs Cons Goods Technology Oil & Gas Sector Indexes: Industries (Broadest-Based) 21

Theme Based Investing Strategy and Theme Based Indexes Dow Jones Sustainability Indexes • Based Theme Based Investing Strategy and Theme Based Indexes Dow Jones Sustainability Indexes • Based on the cooperation of Dow Jones Indexes and Zurich-based SAM, Dow Jones and Dow Jones STOXX Sustainability Indexes track the performance of the leading sustainability-driven companies. • The family includes global and regional indexes, and subindexes excluding alcohol, gambling, tobacco and/or armaments and firearms. Dow Jones Islamic Market Sustainability Index • First indexes from major provider; widely accepted as the standard. • Measure companies that have been screened for compliance with Islamic principles based on financial ratios and industry. • Family includes 70+ indexes for countries, regions, sectors and cap ranges. © Copyright 2007 Dow Jones and Company, Inc. 22

Islamic Asset Class Expansion § § Screening Pricing Data Education & Awareness § Commodities Islamic Asset Class Expansion § § Screening Pricing Data Education & Awareness § Commodities § REITs § Hedge Funds § Portfolio Indexes © Copyright 2007 Dow Jones and Company, Inc. 23

Islamic Investing in OIC Countries § Location Source of Funds § GCC § Location Islamic Investing in OIC Countries § Location Source of Funds § GCC § Location of Underlying Assets Invested § LME Murabaha § Palm Oil (Malaysia) § § Equity Real Estate Commodities PE/VC (Ar. Capita, etc. ) § Absorption of Liquidity without Asset Inflation § Capital flight: How does it benefit Muslim Country? © Copyright 2007 Dow Jones and Company, Inc. 24

Sector Weighting Breakdown (Q 2 2008) What does this mean? Sctrs DJIM Malsi a Sector Weighting Breakdown (Q 2 2008) What does this mean? Sctrs DJIM Malsi a T-25 DJ Malsi a DJIM Turk DJ Ind Arbia 50 DJ Bah DJ Kw T 50 DJIM Kw Oil/ Gas . 6% 1% 19% 9% 31% 19% 4% 2% 0% 0% 0% 2% BM 2 3 30 11 38 11 47 37 10 0 2 8 Ind 40 24 9 10 8 8 11 8 15 2 17 31 CG 35 20 4 10 4 5 8 14 1 -- 1 . 28 HCR -- . 51 2 1 4 . 91 1 1 -- -- -- 1 CS 1 11 8 8 3 . 72 . 49 1 -- 2 1 2 Tele 16 6 20 6 6 3 21 13 20 10 2 5 UTI 3 6 4 1 7 3 7 4 -- -- 0 -- FIN 2 27 6 44 -- 49 -- 20 45 85 69 51 TECH . 4 . 37 -- . 13 -- . 21 -- -- 9 -- 10 . 69 © Copyright 2007 Dow Jones and Company, Inc. DJW Turk DJIM PK DJW PK DJIM Ind 25

What does Sector breakdown mean for an Islamic OIC Index? § Largest sector Eliminated What does Sector breakdown mean for an Islamic OIC Index? § Largest sector Eliminated § Conventional Financial § 2 -3 Sectors more than 70% of Weighting § One Company Sector § Lack of Technology sector implies: § VC Industry/Angel Investing? § Innovation? § Equity Culture? § Knowledge Based Economies? © Copyright 2007 Dow Jones and Company, Inc. 26

Muslim Country Islamic & Conventional Index Top 5 Components & Weightings (Q 1 2008) Muslim Country Islamic & Conventional Index Top 5 Components & Weightings (Q 1 2008) DJIM Turkey DJW Turkey DJIM Pakistan DJW Pakistan Egreg De. Mir Ve Celik (24%) Turkcell 9% Dawood Hercules Chem (10%) MCB (15%) Turkeye Petrol (22) Turkiye Garanti (9) Pakistan oilfields (10) Pak State Oil (5) BIM Birlesik (8) Akbank (8) Pakistan Petroleum (10) Oil/Gas Dev (4) Asya Katlim (6) Turkiye Is Bankasi (6) Oil/Gas Dev (10) J&S Co (4) Turcas Petrol (4) Egreg De. Mir Ve Celik (5) Engro Chem Pk (10) 64% © Copyright 2007 Dow Jones and Company, Inc. 37% 50% Natl bank of Pk (4) 32% 27

Muslim Country Islamic & Conventional Index Top 5 Components & Weightings (Q 1 2008) Muslim Country Islamic & Conventional Index Top 5 Components & Weightings (Q 1 2008) DJIM Malaysia Titans 25 DJ Malaysia DJIM Indonesia DJ Indonesia IOI Corp (19%) Sime. Darby (7%) Bumi Resources (25%) IOI Corp (6) Telekomunikasi (23) Bumi Resources (16%) Telekomunikasi (14) Di. Gi. com (9) Bumiputra Comm Ltd (6) Astra Intl (12) Astra Intl (7) KL Kepong (8) Public Bank (5) Perusahaan Gas (6) Bakrie Bros (7) MISC (7) Malayan Banking (5) Indosat (4) Bank central Asia (6) Sime. Darby (19) 60% © Copyright 2007 Dow Jones and Company, Inc. 29% 70% 50% 28

Muslim Country Islamic & Conventional Index Top 5 Components & Weightings (Q 1 2008) Muslim Country Islamic & Conventional Index Top 5 Components & Weightings (Q 1 2008) DJIM Kuwait DJ Kuwait Titans 50 DJ Arabia Titans 50 DJ Bahrain DJ MSM Stock Exchange Investment Dar (10%) NBK (10%) Ahli United Bank (22%) NBO (10%) MTC (9) KFH (9) Maroc Telecom (10%) Orascom Const (7) Batelco (12) Raysut Cement (10) Agility (9) MTC (9) Orascom Telecom (7) GFH (11) BM (9) MTC (6) NBB (6) Oman Telecom (9) Ithmaar Bank (6) Ren Services (7) Gulf NIG (6) Cble/Elec (6) Boubyan Petro (5) Comm Bank Arab Bank of Kuwait (6) 39% © Copyright 2007 Dow Jones and Company, Inc. 40% 36% 55% 45% 29

What does this sampling of top 5 weighting mean? § Conventional components from OIC What does this sampling of top 5 weighting mean? § Conventional components from OIC § Comparable to non-OIC EM § Capping weightings § Financial sector available § Trading in top 20 companies § Shari’ah compliant components from OIC § Largest/liquid sector eliminated § Free Float § Illiquid Mid-Small caps available § No equity culture (debt screen) § Volatility § Established OIC v Emerging OIC § Malaysia, Turkey, Pakistan, Egypt, Saudi, UAE, Kuwait, etc. § Bangladesh, Nigeria, Jordan, etc. © Copyright 2007 Dow Jones and Company, Inc. 30

Suggestions § OIC Countries § Risk Mindset: Debt v. Equity Culture? § Habit Mindset: Suggestions § OIC Countries § Risk Mindset: Debt v. Equity Culture? § Habit Mindset: Depositors v. Investors? § Fraud on the Unsuspecting (Returns advertised) § Understanding Mindset: Real estate v. Other asset class comprehension? § Shariah Screening § Muslim owned companies § One methodology does not fit all geographies or asset classes § Consensus on Primary Business © Copyright 2007 Dow Jones and Company, Inc. 31

Suggestion Number 1 (Sukuk): § Financial Screens § Conventional Debt § Reduction over a Suggestion Number 1 (Sukuk): § Financial Screens § Conventional Debt § Reduction over a given time frame § Islamic Indexes v Funds: Selling no longer compliant companies § Conversions FIs to IFIs (Sharjah Islamic Bank) § Acquisitions (ADIB acquires Natl Bank of Development (Egypt)) § Equitization of Balance Sheet via Sukuks & Equity Recapitalization § PLUS (Malaysia) WIDER SHAREHOLDERS § Sukuks [financial incentive within time, Ex: IDB Incentive Fund]: § Primary & secondary mkt development § Sukuk Market Development § Yield curves for corporate tenors § Sukuk Trading & Investing vehicles § Expansion to other issuers § Cross Issuers & Buyers © Copyright 2007 Dow Jones and Company, Inc. 32

Billion Dollar Watermark Cross-Over Eurobond Market* * Source: Frank J. Fabozzi, Handbook of Fixed Billion Dollar Watermark Cross-Over Eurobond Market* * Source: Frank J. Fabozzi, Handbook of Fixed Income Securities, 1991 © Copyright 2007 Dow Jones and Company, Inc. Sukuk profile Malaysia 33

Suggestion Number 2: § Index for investable and tradable OIC countries § DJ OIC Suggestion Number 2: § Index for investable and tradable OIC countries § DJ OIC Index § DJ OIC Islamic Index § [Profile Indexes: DJIA, S&P 500, DJIM, MSCI EAFE, FTSE 100, Russell 2000, etc. ) § Sub-Indexes § Transparency & Governance § Investable Products off of the Index § Intra-OIC Investments Liquidity § Liquidity Encourages Listings (BB v FPI) © Copyright 2007 Dow Jones and Company, Inc. 34

Suggestion Number 3 (Complimenting COMCEC: OIC Exchange Cooperation OIC VTP) § Arab Stock Exchange? Suggestion Number 3 (Complimenting COMCEC: OIC Exchange Cooperation OIC VTP) § Arab Stock Exchange? § Islamic Stock Exchange: § Location? § Deciding Compliance? § Listing of companies/products? § OIC VTP: § Neutrality § Gatekeeper of compliance? § Trading of companies & products § Funds Supermarket § Supported by financial information, news, analysis, PLUS: § Obligatory Information § Liquidity to traded company Home country exchange § Proprietary Trading § Global Secondary Sukuk Trading Platform § Cross sell © Copyright 2007 Dow Jones and Company, Inc. 35

Conclusion § Suggesting a Path for Shariah compliance for OIC publicly listed Companies & Conclusion § Suggesting a Path for Shariah compliance for OIC publicly listed Companies & Encourage Listings § Add Depth & Breadth § Encouraging Use of Sukuks § Developing an Equity/risk taking culture in OIC § Establishing an informed Global Portal for Intra. OIC Investment Opportunities for ALL investors § Win Country OIC Level § Win Regional OIC level § Win Global OIC Level © Copyright 2007 Dow Jones and Company, Inc. 36