Category Archives: Information

Information on stock exchanges, share brokers, savings and investment products

Sharia 50 Index by Bombay Stock Exchange

The BSE TASIS Shariah 50 index, launched on Monday, consists of the 50 largest and most liquid Shariah compliant stocks within the BSE 500 Index. It is the first Shariah compliant equity index in India to be publicly disseminated on a real-time basis, providing a new tool for use by Islamic and other socially responsible investors to track the performance of India’s largest and most liquid Shariah compliant stocks.

BSE has partnered with TASIS, the premier Indian Shariah advisory firm to ensure that all stocks included in the BSE TASIS Shariah 50 meet the strictest possible Shariah compliance norms. Stocks are included through two types of screening, business screening and interest activity screening. Business screening ensures that companies selected are not in the business that derives significant benefit from interest or the sale of other goods and services such as alcohol, tobacco, firearms, vulgar entertainment etc. Interest Activity Screening ensures that companies involved in interest-bearing activities are within Shariah tolerance levels.

Not only Muslims, but any socially responsible investors of any faith may find this index and related investment products useful as companies deemed to be socially harmful are removed from the index.

As BSE claims in its fact sheet, the Shariah 50 has outperformed the SENSEX by nearly 25% and the BSE 500 by over 30% over its back-test horizon (beginning 1/1/08). Over this period, annualized volatility for the Shariah 50 was also less than both SENSEX and the BSE 500 by nearly 5 percentage points.

Now for individuals who stay away from investing in stock market with fear of non-compliance with Sharia principle can refer to this index to find companies comply with Sharia principles. It is updated every month to drop any company that ceased to be in compliance and new companies are added every quarter in place of dropped companies. Daily price movement can be seen here. For more information on the individual company, please click on the company name below.

List of Companies

ABB Dr Reddys Lab Mphasis
ACC Exide Inds MRF
Alstom Projects Gail India Nestle India
Ambuja Cements Glaxosmithkl Cons ONGC
Areva T&D Godrej Cons Opto Circuits
Ashok Leyland Grasim Inds PTC India
Asian Paints Hero Honda RIL
Bajaj Auto Hindalco Inds Siemens
BEML Hindustan Copp Sterling Intl
Bharti Airtel Hindustan Unilever Tata Global Beverages
BHEL Lanco Infra TCS
Castrol India Lupin Tech Mahindra
Cipla Mahindra & Mahindra Thermax
Colgate Palmolive Mangalore Ref Titan Inds
Crompton Greav Maruti Suzuki Ultratech Cem
Cummins India Mcleod Russel Voltas
Dabur India Wipro

Sectorwise Weightage

Sl No Sector %
1 Oil & Gas 31.59
2 Transport Equipments 13.36
3 Information Technology 12.44
4 Capital Goods 8.94
5 FMCG 8.47
6 Healthcare 6.39
7 Telecom 5.23
8 Housing Related 4.00
9 Metal,Metal Products & Mining 3.85
10 Textile 1.84
11 Chemical & Petrochemical 1.55
12 Consumer Durables 0.88
13 Power 0.88
14 Diversified 0.58
Total 100.00

Related Links:

BSE TASIS Shariah 50 Index Factsheet.pdf

Scripwise Price Movement in SHARIAH 50


National Bonds revises profit calculation methodology

The National Bonds has revised profit calculation methodology for bond holders with effect from 1st January 2011. The revised calculation will be based on a weightage on term of investment. With the new methodology, the longer your savings & investment period, the higher will be your share of profit. As per the present method, no weightage was given for the period of holding and the bond holder was entitled to the profit at the same annual rate.

With revised system, the bonds will be categorised into four tiers based on the length of their investment.

Tier 1: Bonds invested for less than 3 months – entitled to 40% of annual rate of profit. If the annual rate is 6%, Tier 1 Bonds will get only at annual rate of 2.4%

Tier 2: Bonds invested for 3 months and less than 6 months – entitled to 60% of annual rate of profit. If the annual rate is 6%, Tier 2 bonds will get only at annual rate of 3.6%

Tier 3: Bonds invested for 6 months and less than 1 year – entitled to 80% of annual rate of profit. If the annual rate is 6%, Tier 3 bonds will get only at annual rate of 4.8%

Tier 4: Bonds invested for 1 year or more – entitled to 100% of annual rate of profit. If the annual rate is 6%, Tier 4 bonds will get the full 6%

If you invest in the middle of the year and stay till the next profit announcement, then you will automatically be paid the profit for the interim period based on the Tier 4 weightage. However if you leave before completing 1 year after the announcing of the profit (1 year from the date of investment), your profit will be recalculated based on the actual Tier and any excess distribution of profit will be deducted from your bonds.

The National Bonds is a national savings scheme of UAE. It gives the flexibility and liquidity of a savings account and a return that mostly match with that of a fixed deposit of banks.  You can deposit as low as Dhs. 100 and can withdraw any time and any portion of investment after one month. Profit is distributed at the end of the year only. The weekly prize draw is its main attraction. It distributes cash prizes ranging from Dhs. 100 to 10,000 to 5,135 winners and a monthly prize of Dhs. 1 million to one winner. The bond holder is also automatically entitled for an Islamic life insurance cover (Takaful).

For more information:
http://www.nationalbonds.ae/$Common/images/FAQE.pdf

http://www.nationalbonds.ae/$Common/images/profitE.pdf

http://www.nationalbonds.ae/MediaCenter/NewsDetails_en_gb.aspx?newsid=226_en_gb

Fixed Deposit with Islamic Banks in UAE

Fixed deposit is one option if you need to park your savings for a shorter period, say a year or less. Fixed deposit is for a fixed period from one month to one year or even more. Conventional banks offer a fixed interest rate which varies based on the duration. Islamic banks in UAE give better return compared to its counter part in the conventional banking sector. The rate with Islamic bank is not fixed upfront, but it is declared at the end of a fixed period which is mostly every three months.  It is a profit rate which is derived from the profit they make from the investment of your fund. The profit earned on the fund is shared between bank and the depositors in a fixed proportion and the share of depositor profit is distributed among depositors periodically. Recently more and more conventional banks are offering Sharia compliant deposits and investment products.

Profit rate declared for the quarter ended 31st March 2010

Bank

1 month

3 months

6 months

9 months

1 year

Dubai Islamic Bank 3.00% 3.05% 3.10% 3.15% 3.25%
Emirates Islamic Bank N/A 3.26% 3.35% 3.53% 3.80%
Mashreq Al Islami 1.82% 3.28% 3.77% 4.25% 4.49%
Noor Islamic Bank* 3.00% 3.40% 3.65% 3.60% 3.80%
ADCB Meethaq 2.47% 3.60% 4.08% N/A 4.70%

* Noor Islamic Bank rate is as declared for the month of April 2010

Related Links:

http://www.dib.ae/en/personalbanking_investmentaccount-profit.htm

http://www.emiratesislamicbank.ae/nr/eib/default.htm

http://www.mashreqalislami.com/personal/accounts/profit_rates/

http://www.noorbank.com/ae/english/personal/accounts/mudaraba-profit-rates/index.aspx

http://www.adcbmeethaq.com/PersonalBanking/accounts/terminvdepositrates/terminvestmentdepositrates2010.asp

More on savings

More on Fixed Deposit

Resources for investors

There are a plenty of information on internet about investment opportunities. Many of them are junk which often mislead or confuse retail investors. Ignorant and careless people fall victims of those so called experts advices. Undoubtedly there are many reliable and trustworthy sources as well on which can be relied upon. Investors always should double check with multiple sources in order to reduce risk of uninformed investment decision. There are various paid and free resources such as paid and free research reports, contents on web and print media. If you are an investor, don’t solely depend on broker’s recommendation as it may not be always good for an investor who aims for long term wealth creation. Remember that brokers earn fee and make money when you buy and sell more often, not when you buy and hold it.

We list some of those resources here.

News and Market information on Indian Capital Market

Moneycontrol.com

Moneycontrol.com is an information hypermarket for Indian capital market. It provides in depth coverage on market information including IPO’s and mutual funds. Their free portfolio service is an essential tool to track the equities.

Google India Business News

Google India Business News provides a collection of latest business news from various websites.

Research Reports on Indian Equity

Equitymaster.com

Equitymaster.com provides many paid subscriptions through its web sites and email. Research reports and recommendation by Equitymaster is purely based on the fundamental analysis for long term investors. It strongly discourages share traders and technical analysis.  Stock Select, Mid Cap Select, Hidden Treasure, Research Pro, Value Pro are the research products from Equitymaster.

KRChoksey

K R Chocksey offers many paid subscription to various reports under KRC Earning Ideas based on technical and fundamental analysis. One among them is Between the Lines which is a daily corporate analysis report providing analytical points of corporate developments market actions. Other research products under KRC Earning Ideas are Market Outlook, Good Evening KRC and Cherry Picks.

IDBI Paisabuilder

IDBI Paisabuilder provides many free research reports and information on stock markets, mutual funds, IPO’s, corporate and industry. It also provide interactive tool to Multex Company Estimates and top analyst recommendations. Its Corporate Library section provides comprehensive research on over 4000 companies with detailed company financial information about companies which you will need for investing in shares – company snapshot, background, management, P&L, Assets & Liabilities, Sources of Funds, Important Ratios, Results Dividends, Capital history, Share prices, news. You can also compare these among peer companies. Explore this section for all your company stock information needs. IDBI Pasisabuilder is indeed a best free tool available.

Business Line Investment World

The Hindu Business Line Investment world published every Sunday give recommendation based on fundamental research on 3-5 stocks every week. Recommendations provided through this feature have been very successful. Investor can consider these recommendations.

Business News and Market information for UAE and Middle East

ameinfo.com

It claims itself as ultimate Middle East business resources. It provides comprehensive business news and analysis in UAE and other Middle East countries. It also provide on its website third-party research reports on equities and stock

Noozz.com

Noozz claims itself as the leading provider of premium business information on emerging markets. It provides news, market research and business services under one roof focused on individual emerging market like UAE, Saudi Arabia, Kuwait, Qatar etc. Its contents is provided on paid subscription

Arabian Business

ArabianBusiness.com is the Middle East’s premier business portal. It provides most up to date comprehensive news and reports