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MUI’s new edict to lure more sharia-compliant stock investors
Sharia-compliant investors accounted for around 2.9 percent of total investors in the capital market as of February this year.
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A worker passes an electronic price display at the Indonesia Stock Exchange (IDX)
(Antara/Sigid Kurniawan)
The capital market may be seeing more Muslim investors after the Indonesian Central Securities Depository (KSEI) received an edict from the Indonesia Ulema Council's (MUI) sharia division on its sharia-based services.
The newly issued edict on sharia-based securities transaction settlements and custodial functions complements the council's existing list of edicts on sharia-compliant investments, which have been flourishing in the Muslim-majority country.
One of them is an edict issued in 2011 on the Indonesian Stock Exchange's (IDX) sharia-compliant equity trading.
KSEI president director Friderica Widyasari Dewi expressed hope that the edicts received by her company and the IDX, along with the Financial Services Authority's (OJK) Islamic securities list, could lure potential investors who were previously worried about whether the nature of the stock exchange was acceptable under Islamic teachings.
"We want to convince potential investors that the stock exchange's upstream and downstream lines have aligned with sharia principles," she told reporters on the sideline of the edict issuance ceremony in Jakarta on Monday.
She said that a sharia-compliant stock exchange had a remarkable potential in Indonesia, where existing infrastructure has supported the growth of sharia-compliant investments. Around 60 percent of the 625 stocks listed in the IDX and 12 online trading systems have complied with sharia laws, she added
