KLSE (MYR): FGV (5222)
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2024-11-07
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Victor Yong
8,271 posts
Posted by Victor Yong > 2018-12-07 13:20 | Report Abuse
Fgv is syariah compliant:)
TOKYO: Investors looking for a safe haven in turbulent financial markets should consider Islamic equities, according to a recent study.
Restrictions on debt and the diverse investment goals for syariah-conscious shareholders could help provide a shelter in a time of crisis, academics including Sohel Azad of Melbourne’s Deakin Business School wrote in the November issue of the Journal of International Financial Markets, Institutions and Money.
There are also differences in Islamic market structure that mean assets might be slow to respond to the effect of a downturn, they indicated.
“The interplay of these three forces can allow Islamic indices to behave differently from conventional ones, especially during a financial crisis, making them a good hedge,” the authors wrote.
“We suggest that during major economic and financial crises, investors could use Islamic stocks to diversify their risks.”
Investor interest in Islamic finance is growing and the global Islamic banking and finance industry had more than US$2 trillion in assets at end-2017, according to the Islamic Financial Services Board. The study defined syariah-compliant indexes as excluding firms involved in non-Islamic finance, gambling, tobacco and entertainment, as well as those with debt-to-market value ratios above 33%.
The authors analysed the performance of the Dow Jones Islamic Index relative to a number of developed and emerging-market equity benchmarks over a 15-year period from 2000. The authors found “strong support” for Islamic stocks as a haven during crisis periods.
During the financial crisis, Islamic shares acted as a strong haven in particular for investors in the MSCI Europe Index, MSCI Asia Pacific Index and French, Hong Kong and US markets, they said. — Bloomberg