arabtimesonline.com - The Dow Jones Islamic Market Turkey Index closed at 2,954.44, a performance loss of 2.84%, while the Dow Jones Turkey Total Stock Market Index closed at 1,068.38, a gain of 1.84%. (source)
DUBAI, Oct 7: September marked a turning point for the global markets as the price rally in gold was halted (at first), and oil prices fell significantly. Investors, however, continued to wait for a turnaround as the majority of financial markets remained lower. “The Sky falls in,” said Gary Dugan, Chief Investment Officer, Private Banking, at Emirates NBD in Dubai. “The Eurozone is now seen for what it is - a failed economic experiment.” As markets become increasingly nervous about a possible sovereign default in Greece, only a few exchanges bucked the downtrend. Within the Dow Jones Islamic Market Indexes (DJIM) family, the DJIM Pakistan Index posted the largest advance in September, gaining 3.50%. With its year-to-date gain of 5.32%, the DJIM Pakistan Index is also the DJIM family’s top gainer for the first three quarters of 2011. And, while the DJIM Kuwait Index added 0.20% in September, it is down 17% since the beginning of the calendar year, making it one of the top losing composites year-to-date.
“Due to the politically divided environment, along with some corruption scandals in Kuwait, the Kuwaiti government’s ability to implement its ambitious $104 billion investment plan is compromised,” said David Lubin, Head of Emerging Markets Economist at Citigroup. “It is unlikely, in our view, that full execution of the plan will occur, with a more realistic scenario of around $70 billion of the projects actually being implemented, at best.”
All other Shari’ah-compliant benchmarks in the DJIM Indexes family posted losses in September. It is noteworthy that the emerging markets in the East - and not the Western indexes of debt-crisis-ridden Europe and the U S - suffered significant drops: the DJIM BRIC Index and the DJIM Hong Kong Index both ended the month down 15.60%. The two benchmarks were only underperformed by the DJIM China Offshore Index, which plunged 18.84%. In comparison, the US bellwether index, the Dow Jones Industrial Average, fell 6%.
Meanwhile, as oil prices dipped by almost a tenth last month to less than $80 per barrel (US crude), the DJIM Oil and Gas Index and the DJIM Basic Materials Index plummeted 13.14% and 19.18%, respectively, in September. All 10 DJIM Indexes declined year-to-date, with six of them posting losses of more than 10%. “Whilst there is only a one in 34,000 chance of being hit by a satellite, it is now a near certainty we will get a global recession,” Emirates NBD’s Dugan said. “We are already seeing signs of companies in many parts of the world announcing further rounds of job cuts and restructuring.”
Despite the gloominess, there was some favorable Islamic finance news:
n an Ernst and Young report indicated that global Islamic fund assets under management increased by 7.6% to $58 billion in 2010;
n Barclays Capital (Middle East) has received a license from the Dubai Financial Services Authority to develop and offer Shari’ah-compliant product; and
n the Abu Dhabi National Energy Company, one of the largest oil and gas firms in the Gulf Arab region, announced plans to sell as much as $1.1 billion of Islamic bonds in Malaysia.
The global Dow Jones Islamic Market Titans 100 Index, which measures the performance of 100 of the leading Shari’ah compliant stocks globally, had a down month in September with a loss of 7.19%, closing at 2019.36. In comparison, the Dow Jones Global Titans 50 Index, which measures the 50 biggest companies worldwide, posted a loss of 6.24%, closing at 160.21.
n The Dow Jones Islamic Market Asia/Pacific Titans 25 Index, which measures the performance of 25 of the leading Shari’ah compliant stocks in the Asia/Pacific region, decreased 8.62% in September, closing at 1848.95. The Dow Jones Asian Titans 50 Index, in comparison, posted a loss of 8.74%, closing at 116.08.
n Measuring Europe, the Dow Jones Islamic Market Europe Titans 25 Index, which measures the performance of the 25 of the leading Shari’ah compliant stocks in Europe, closed at 1874.93, a loss of 10.38% in September, while the conventional Dow Jones Europe Index loss 11.31%, closing at 221.76.
n Measuring the performance of 50 of the largest Shari’ah compliant US stocks, the Dow Jones Islamic Market US Titans 50 Index decreased in September, closing at 2099.81. It represents a loss of 5.59%. The US blue-chip Dow Jones Industrial Average decreased 6.03%, closing at 10913.38.
Middle East and GCC Regions
Dow Jones Islamic Market Indexes versus Conventional Dow Jones Indexes
In September, the Dow Jones DFM Titans 10 Index, measuring the 10 largest and most liquid stocks listed on the Dubai Financial Market, closed at 1,940.54. It is a loss of 2.99%.
The Dow Jones Islamic Market Kuwait Index posted a gain of 0.20%, closing at 842.14. Its conventional counterpart index, the Dow Jones Kuwait Composite Index, was down, closing at 204.87. It represents a loss of 0.01%.
The Dow Jones Islamic Market Turkey Index closed at 2,954.44, a performance loss of 2.84%, while the Dow Jones Turkey Total Stock Market Index closed at 1,068.38, a gain of 1.84%.
Measuring the performance of Shari’ah compliant stocks of five of the Gulf Cooperation Council (GCC) member states, the Dow Jones Islamic Market GCC Index closed at 1187.14, a loss of 0.15%. The conventional Dow Jones GCC Index was down 1.07%, closing at 1,353.24.
Other Markets and Asset Classes
In September, the Dow Jones Islamic Market BRIC Equal Weighted Index decreased 15.60%. It had a closing value of 1652.70. By comparison, the Dow Jones BRIC 50 Index closed at 482.68, a loss of 14.58%.
The Dow Jones Citigroup Sukuk Index, which measures the performance of global bonds complying with Islamic investment guidelines, decreased 0.96%, closing at 130.92.
The Dow Jones Islamic Market Sustainability Index, which measures sustainable practice business of companies respecting the Shari’ah laws, decreased 8.93%, closing at 2171.08. The conventional Dow Jones Sustainability Index loss 8.43% with a closing value of 889.71.
Global September 2011 Industries Winners and Losers
All DJIM Industry Indexes were down for the month of September. The three Dow Jones Islamic Market Industry Indexes posting the narrowest loss were Technology, Health Care and Consumer Services with down performances of 4.70%, 4.79 and 5.93%, respectively.
The Dow Jones Islamic Market Basic Materials, Dow Jones Islamic Market Oil & Gas and Dow Jones Islamic Market Industrials Indexes were the three worst performing industry indexes with down performances of 19.18%, 13.14% and 11.71%, respectively.
