South Africa’s first equity linked Shari’ah EFT
Absa Capital, the investment banking division of Absa Bank Ltd, further redefined the local Exchange Traded Fund (ETF) market today when it brought South Africa’s first Shari’ah compliant equity-linked ETF to market.
The Shari’ah Top 40 Index ETF tracks the FTSE/JSE Shari’ah Top 40 Index jointly established by London’s FTSE International Ltd (FTSE) and the JSE. The initial public offering for the Shari’ah Top 40 Index ETF opened on 23 February and raised R27 million ahead of listing.
Commenting at today’s listing Vladimir Nedeljkovic, Head of ETFs and Index Products at Absa Capital said: “The Shari’ah Top 40 Index ETF is the first equity-linked Shari’ah compliant ETF in South Africa.
“The Shari’ah Top 40 Index ETF has effectively redefined the Muslim investment landscape in South Africa. It is a cost efficient, transparent and easy to access invest product that conforms to Shari’ah law,” said Nedeljkovic.
He expects the product to continue to be well received in a market that urgently requires more local Islamic investment products. There is an estimated 400 000 Muslim households in South Africa.
The Shari’ah Top 40 Index ETF provides investors with diversified exposure to the broad market through investing in one product and earning a market related performance. It also offers a credible Islamic investment opportunity aligning the South African Islamic investment market with global trends.
The Shari’ah screening of the index constituents is performed by Yasaar Ltd (Yasaar) using a two-step methodology. Yasaar represents all major Shari’ah schools of thought, creating a best practice approach that has credibility across all regions of the Islamic world. The ongoing screening of the Shari’ah compliance of the ETF is conducted by Absa’s Islamic Banking Shari’ah Supervisory Board.
Absa Capital’s NewGold ETF, the largest ETF in the South African market, with approximately R9bn in assets, is also Shari’ah compliant after it was approved by the Shari’ah Supervisory Board.
Ends…Note to the editor:About Absa Capital
Absa Capital, a division of Absa Bank Limited (Absa) and affiliated to Barclays Capital, is a leading South African investment bank with global reach, offering clients financing, risk management and advisory solutions in a wide range of currencies and structures across the globe.
About Absa Capital ETFs and Index Products
Absa Capital is a leading originator of exchange traded funds (ETFs) in the South African market. The investment bank listed and operates NewRand, the first ETF in South Africa based on a proprietary investible index (the NewRand Index, comprising rand hedge stocks with the highest correlation with the Rand/USD exchange rate), as well as NewGold, the first and only gold ETF in South Africa as well as the largest ETF in the SA market with R8.7 billion in assets under management.
Absa Capital ETFs are listed on the JSE Ltd and can be traded at any time throughout the course of the day. Typically, ETFs try to replicate a stock market index such as the FTSE/JSE Top 40 Index, a market sector such as resources or financials, or a commodity such as gold.Related Websites
If you would like to know more about the fund, its composition or the FTSE/JSE Shari’ah Top 40 Index screening methodology go to etf.absacapital.com
For further information on Yasaar, go to www.yasaar.orgAbout Absa Islamic Banking
Absa Islamic Banking is a division of Absa Group Limited. It was established during 2006 based on the need to provide financial products and services that were suitable for each sector of Absa’s diverse customer base and to take advantage of the opportunity offered by the Muslim communities of South Africa and Africa.
Absa Islamic Banking differs from Absa’s conventional banking offering in that it operates according to the dictates of Shari’ah Law. The independent Shari’ah Supervisory Board oversees every aspect of this process and approves all products and processes to ensure that the end to end customer experience is fully Shari’ah compliant.
In addition to retail transactional and investment products, customised products also meet specific client needs. This level of customer responsiveness resulted in Absa Islamic Banking being awarded Shari’ah Deal of the Year by Islamic Finance news in 2006. During 2007 Absa Islamic Banking was awarded Best Islamic Offering from a Conventional Bank by World Finance magazine and was voted Best Islamic Bank in Africa for 2007 and 2008 by Islamic Finance news.
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|From left to right: |
Alan Miller - Managing Executive: Absa Investments;
Ahmed Moola - Managing Director: Absa Islamic Banking;
Vladimir Nedeljkovic - Head : ETFs and Index Products