The launch of Europe’s first Christian equity index, Stoxx Europe Christian Index, will not be a threat to Islamic finance growth but will complement the rising demand for a more ethical type of investments, says the Raja Muda of Perak, Raja Dr Nazrin Shah (picture).
As a result of the financial crisis, people are becoming aware that some of the ethical lapses of conventional banking or excesses could be avoided or mitigated, he said.
For example, these can be avoided if some of the precepts of Islamic finance have been followed, said the Malaysia International Islamic Financial Centre (MIFC) financial ambassador.
On whether the recent launch of Christian-related products could pose a threat, Raja Nazrin said it would not be the case.
“The more asset class you make available to the investing public, it is more beneficial to the public. They can make a choice or they can allocate their resources on a balance, depending on their risk appetite.
“Certainly, lessons need to be learnt from the excesses of conventional financial system that has brought us too many sorry states today,” he told reporters in an interview in conjunction with the MIFC roadshow to the United Arab Emirates and Saudi Arabia.
Meanwhile, Bursa Malaysia Bhd chief executive officer Datuk Yusli Mohamed Yusoff said the new equity index should be seen as a healthy competition for syariah-compliant indices especially in meeting investors’ appetite for diversification and greater choice.
He said there was plenty of space in the market for Christian and syariah-compliant instruments to co-exist.
“Investors ultimately look at returns and the instruments that can give good returns on a sustainable basis as well as the managed risk involved are the ones that are going to be successful in the long run,” he said.
Yusli said the Christian index is the response to the growing demand for a more ethical type of investment instruments that have lower risks against the backdrop of the recovering global economy.
“This is similar to syariah-compliant investments as promoted in Malaysia. The recent growing trend is for fund managers to look at more sustainable and more ethical type of investment instruments,” he said, adding that syariah-compliant stocks are also based on similar ethical principles.
Yusli said if the demand for more ethical-based investments increased, the players in the industry would have to come up with such products.
The Stoxx Europe Christian Index, launched yesterday, comprises 533 European companies that derive revenue only from approved sources “according to the values and principles of the Christian religion.”
BP, HSBC, Nestlé, Vodafone, Royal Dutch Shell and GlaxoSmithKline are among the companies in the index. — Bernama
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