28 October 2008 Over $5.6 trillion wiped off the value of shariah-compliant equities worldwide during the third quarter of this year, according to Standard and Poor's latest report released yesterday. However, the latest review of the S&P Global Shariah Index Series (GSIS) confirmed that in most cases, Shariah investors have benefited from their lack of exposure to financials, which has been the focus of the market sell-off. Stocks deemed to comply with Islamic law lost 23.4 per cent of their value on a total return basis over the year from last September 30, as measured by the S&P Global BMI Shariah index, covering 52 of the world's largest developed and emerging markets. The non-shariah conventional index, S&P Global BMI, fell 25.3 per cent over the same period. Shariah-compliant stocks in emerging markets bore the brunt of the selling, with the S&P Emerging Markets BMI Shariah plunging 37 per cent, compared to a 35.4 per cent loss for its non-Shariah counterpart. "While equity markets around the world have experienced a tumultuous quarter, shariah investors continue to be shielded to some extent by the exclusion from their portfolios of financial stocks and other highly leveraged companies which don't satisfy the strict compliance criteria associated with Islamic law," said lka Banerjee, vicep-resident, S&P Index Services. S&P Global Benchmark Shariah Index Series reveals that the consumer-staples sector suffered the mildest declines within the Shari'a-compliant universe, dipping -0.28 per cent over the third quarter. The healthcare second followed in second place, with losses of -2.60 per cent. Shari'a-compliant stocks in the materials sector posted the heaviest losses, however, down 36.49 per cent. On a country-basis, shariah investors fared worse in Australia, Turkey, South Africa and Ireland over the third quarter. The Philippines, staging a remarkable turnaround after suffering the heaviest losses in the second quarter, was the only country to post a positive return in the third quarter, up 0.8 per cent. S&P's Global Benchmark Shariah Index Series covers 52 developed and emerging markets as well as ten GICS (Global Industry Classification Standard) sectors. It is part of Standard & Poor's family of Shariah-compliant indices, designed to offer a comprehensive set of Islamic investment solutions for both benchmarking and investing activity. S&P's Shariah indices are screened by Ratings Intelligence Partners, an independent Kuwait-based consulting company, collaborating with the S&P index committee, to apply a set of independent and objective guidelines for the day-to-day maintenance of each shariah index. The firm's shariah indices undergo sector- and accounting-based screens excluding businesses offering products and services considered unacceptable or non-compliant according to shariah law.

© Bahrain Tribune 2008 & omar 1.1:zy