In accordance with Shariah law, Muslims are not allowed to spend money on businesses that gain substantial gain from interest, as Muslims consider this to be usury. In order to facilitate business-minded Muslims who wish to diversify their investment portfolios, the Bombay Stock exchange (BSE), the Mumbai-based Taqwaa Advisory and Shariah Investment Solutions have introduced an Islamic stock index of India's top 50 companies that adhere to Shariah law. Listed as the BSE TASIS Shariah 50, the index picks the top 50 companies within the BSE 500 with liquid stocks that are Shariah-compliant. They'll now be able to follow their laws without having to take out substantial personal loans. Resource for this article - Shariah Islamic stock index opens in India by MoneyBlogNewz.
Exploring the Islamic stock index shows sector developing
There was a 0.5 percent increase this morning in the Islamic stock index. That is more impressive than the Bombay Stock exchange, accounts the Wall Street Journal. There is not much risk or additional interest typically with the Shariah-compliant merchandise like mutual funds. The Islamic world does this a lot. Shariah finance - in which the Bombay Stock exchange TASIS Shariah 50 is expected to play a major role - is a trillion-dollar industry worldwide, accounts the WSJ. As one of the largest Muslim markets on earth resides in India, where 15 percent of the population (175 million) is Muslim, the demand for the Islamic stock index isn't surprising.
Looking at the credit-to-deposit proportion
A recent study by the Reserve Financial institution of India found that while the national credit-to-deposit ratio hovers around 74 percent, it is only 47 percent for Indian Muslims. Indian Muslims might buy assets for under the rest of the Indian population or start a business too. This is because Indian Muslims borrow a lot compared to what they save, reports the WSJ. The BSE TASIS Shariah 50 can be really good to make the ratio for Indian Muslims get smoothed out. There's a chance that Islamic finance that is foreign might start going to India too now with the Islamic stock index.
Information from
Debt Steps
Wall Street Journal
blogs.wsj.com/indiarealtime/2010/12/27/bombay-exchange-hopes-to-score-with-shariah-index/
Some call it 'financial jihad'
The above advantages of Islamic Finance like not dealing with complex financial deals rather robberies etc have saved Islamic Funds from falling like other general funds.
It has also been documented in a video, the link being
Islamic Finance is more like Value based Investments, since it avoids high debt etc.
We at WealthCity in India www. wealthcity.in follow similar norms and found the Shariah returns are far better than conventional returns.