SPV Structure in Sukuk by Ahmed Adil

Top 20 FREQUENT WORDS

shariah 232 index 198 indices 98 standard 54 global 52 return 45 bmi 39 methodology 35 islamic 34 usd 32 markets 30 compliance 27 pan 27 stocks 25 net 24 compliant 23 euro 23 constituents 22 underlying 20 japan 19

DOCUMENT KEY POINTS

• these are gauges of major markets sectors and regions and by screening out stocks that are not shariah compliant these become ideal investment vehicles for observant musli miss shariah screening standard poor s has contracted with ratings intelligence partners ri to provide the shariah screens and filter the stocks based on these screens

• subsequently several other regions have been targeted including the gcc the pan asia large cap sector global property markets the middle east north africa mena the emerging markets and most recently the broad market index bmi global series using the relevant standard poor s underlying benchmark indices
• highlights a c leading equity indices screened for shariah compliance a c all indices are liquid and investable a c shariah compliance is as per the strictest standards observed by middle eastern countries a c indices are maintained for compliance on a periodic basis index family major s p indices are selected for shariah screening

• these are argentina australia austria belgium brazil canada chile china colombia the czech republic denmark egypt finland france germany greece hong kong hungary iceland india indonesia ireland israel italy japan jordan luxembourg malaysia mexico morocco the netherlands new zealand nigeria norway pakistan peru the philippines poland portugal south korea russia singapore slovenia south africa spain sweden switzerland taiwan thailand turkey the united kingdom and standard poor s s p shariah indices methodology

• in addition there are regional indices such as the s p bmi europe shariah s p bmi north america shariah s p bmi asia pacific shariah s p bmi pan asia shariah s p bmi asia pacific ex japan shariah s p bmi pan asia exjapan shariah and s p bmi pan asia ex japan australia and new zealand shariah

• those constituents in the bottom of market capitalization of each country index then form the s p citigroup world emi index a subset of the world bmi
• markets included are australia austria belgium canada denmark finland france germany greece hong kong iceland ireland italy japan luxembourg the netherlands new zealand norway portugal singapore south korea spain sweden switzerland the united kingdom and the united states

• the above industries are not considered islamic and would not be appropriate for investment for observant musli miss accounting based screens after removing companies with non compliant business activities the rest of the companies are examined for compliance in financial ratios as certain ratios may violate compliance measurements
• these are accounts receivables market value of equity month average cash interest bearing securities market value of equity month average standard poor s s p shariah indices methodology

• timing of changes in general additions will be made to the shariah indices once a month typically the third friday of the month after the addition to the underlying index if found compliant by the shariah board
• if any of these stocks become compliant because of changes in financial ratios or a change in business activity due to mergers or restructuring it will be added to the shariah index with notice to clients

• additions and deletions to the index which will occur due to ongoing reviews and changes in compliance will be done on the third friday of each month with advance notice to clients
• all deletions from the parent index will be deleted from the shariah compliant index on the same day

• this means the level of an index reflects the total float adjusted market value of all of the component stocks relative to a particular base period
• the divisor is adjusted such that the index value at an instant just prior to a change in base capital equals the value at an instant immediately following that change

• when a corporate action affects the price of a security a such as when the price drops on a special distribution ex date a the price of the security is adjusted on the ex date and the index divisor is adjusted to offset any change in the total market value of the index
• they do not reflect changes in the market capitalization of the index or of the individual stocks that are caused by corporate actions such as dividend payments stock splits distributions to shareholders mergers or acquisitions

• this helps keep the value of the index accurate as a barometer of stock market performance and ensures that the movement of the index does not reflect the corporate actions of the companies in it
• corporate actions maintaining the s p shariah indices includes monitoring and completing the adjustments for company additions and deletions share changes stock splits stock dividends and stock price adjustments due to restructurings or spin offs

• the iwf is exactly the same as it is for the constituents in the underlying indices

• the net reinvested return series approximates the returns available to an investor based in luxembourg reflecting the minimum possible dividend reinvestment since the highest rates are theoretically applied to luxembourg based investors
• index data total return and net return indices both a price return and a total return index series are calculated

• as the numbers of companies in the s p global indices are often fixed constituent changes are generally driven by mergers and acquisitions activities or the impairment of a stock s ability to reflect the market due to a substantial change in size or liquidity

• a c shariah board member for national commercial bank saudi arabia citi islamic investment bank saudi arabia saudi american bank saudi british bank and dow jones islamic index united states
• a c editor review of islamic economics london journal of the international association of islamic economics

• a c author and presenter of many articles and books in islamic economics accredited trainer in the islamic business field by many institutions inside and outside kuwait
• a c faculty member at the american university of cairo in lecturer at the college of trading studies in kuwait

• index precision the level of precision for index calculation is as follows a c index values are published rounded to two decimal places
• the s p europe shariah is calculated on all days of the year except when all the component markets are closed

• spshglen gcc shariah bloomberg a bloomberg a index price total return s p gcc shariah usd spshg spshgt s p gcc shariah investable index usd spshgi spshgit standard poor s s p shariah indices methodology
• are made at pm eastern time announcements for other indices are made at pm eastern time

• spshbren pan asia shariah index bloomberg reuters s p pan asia shariah index usd spshas
• s p ifci large midcap shariah index bloomberg reuters s p ifci large midcap shariah usd spshem

• spshghen global property shariah index bloomberg reuters s p global property shariah index usd spshgu
• pan arab shariah index bloomberg reuters s p pan arab shariah index usd spshpa

• ftp daily stock level and index data are available via ftp on subscription
• for further information please refer to standard poor s web site at

• product management alka banerjee a vice president global index management alka banerjee standardandpoors dot com

• no portion of this publication may be reproduced in any format or by any means including electronically or mechanically by photocopying recording or by any information storage or retrieval system or by any other form or manner whatsoever without the prior written consent of standard poor s

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DOCUMENT WORD ANALYSIS

Main Category

AlHuda Material\sukuk islamic

KeyWords

asset invest risk ici rate investor origin credit financi structur securitisation NA iif required exposure fund estate servic NA legal

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DOCUMENT REFERENCES

Number of Pages

27

Published Date

2008-07-03 00:12:20

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