Egypt Launches Its First Index for Islamic Stocks

Egypt has launched on Wednesday its first index for the stocks compliant with the Islamic finance. This was on the sidelines of the fourth forum of the Egyptian Islamic Finance Association‏ (EIFA) convened on Wednesday entitled ‘The Islamic Finance in Egypt … Innovation Challenges’.

During the forum, EIFA has launched its list of financial instruments that are compliant with Islamic Law in the country’s bourse – the Egyptian Exchange (EGX).

Launching the list of sharia-compliant equities comes as part of its efforts to raise awareness of Islamic finance in Egypt.

The organization’s sharia board has approved the list, with rules based on the standards of the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), a major standard-setting body.

Officials in the Egyptian association said the country’s listed companies shall raise their level of compliance with AAOIFI standards if they want to attract Islamic investors from the Gulf.

The association was founded in February of this year. The rise of Islamist movements including the Muslim Brotherhood after last year’s ouster of president Hosni Mubarak has raised expectations for growth of Islamic finance in Egypt.

Countries such as Malaysia and Indonesia publish lists of sharia-complaint equities as part of efforts to raise the profile of the industry.