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Jakarta Post

New sharia index launched to boost liquidity, investor base

  • Esther Samboh

    The Jakarta Post

Jakarta   /   Fri, May 13 2011   /  08:00 am

The Indonesia Stock Exchange (IDX) officially launched a new equities index on Thursday in a move expected to boost liquidity and widen the investor base amid a growing interest in equities in the world’s biggest Muslim-majority country.

The Indonesia Sharia Stock Index (ISSI), which comprises 214 Indonesian stocks, allows investors to buy stocks without violating Islamic investment guidelines which have been screened by the Indonesia Ulema Council (MUI).

“Trading practices that are not compliant with sharia principles can be eliminated, such as those that are engaged in excessive risk-taking, gambling, manipulating, speculation from interest payments,” MUI deputy chairman Ma’ruf Amin told The Jakarta Post following the sharia index’s launch event at JW Mariott Hotel in Jakarta.

The index excludes stocks of banking, and cigarette and alcohol firms, among ot...