Indian Muslim stock exchange opens for enterprise

Muslims are forbidden by Shariah law from investing in corporations that make a profit off interest. To be able to leave the opening for those Muslims who do want to invest within the confines of Shariah, the Bombay Stock exchange (BSE) and two other Islamic investment groups have created an Islamic stock index for Muslims in India. 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 will now be able to follow their laws without having to take out sizeable pay day loans.

Looking at the Islamic stock index shows industry developing

According to the Wall Street Journal, the Islamic stock index was up 0.5 percent this morning, which was an even more impressive performance than the BSE as a whole. In the Islamic world, it is typical for lots of trading in Shariah-compliant merchandise like mutual funds that won’t give more interest or extra risk. A huge role is the Bombay Stock exchange TASIS Shariah 50. The trillion dollar industry in the world is Shariah finance the WSJ reports. India is where one of the largest Muslim markets on the earth is where about 175 million, or 15 percent, of the population is Muslim. It makes perfect sense for there to be such a high demand for the Islamic stock index.

The credit-to-deposit proportion

The national credit-to-deposit proportion is about 74 percent, although Indian Muslims only have it at about 47 percent which was discovered by the Reserve Financial institution of India. What this means, as outlined by the WSJ, is that compared to what Indian Muslims conserve, they borrow a great deal of money that could feasibly be used to open an enterprise or purchase assets at a lower rate than the rest of the Indian population. The BSE TASIS Shariah 50 may be really good to make the proportion 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.

Citations

Debt Steps

debtsteps.com/credit-to-debt-ratio.html

Wall Street Journal

blogs.wsj.com/indiarealtime/2010/12/27/bombay-exchange-hopes-to-score-with-shariah-index/

Some call it ‘financial jihad’

youtube.com/watch?v=Ulp_96DYiqg