Speaking to the Anatolia news agency yesterday, Erkan recalled that the Economic and Commercial Cooperation Permanent Committee (İSEDAK) of the Organization of the Islamic Conference (OIC) had assigned the İMKB the task of creating cooperation between the stock exchanges of its 57 member countries. The İstanbul stock market conducted studies on creating an Islamic index as part of this assignment, the president noted, and went on to say: “We will not create an Islamic index specifically for Turkey. Our real purpose is to build an index that includes companies being traded on the stock exchanges of Islamic countries while creating investment funds based on this index. After being entrusted with the task of ensuring cooperation between the bourses of Islamic nations by İSEDAK, we first conducted a preliminary study which ascertained that the best way to achieve this teamwork would be through a common index.”
An Islamic index is one comprising companies that are Shariah compliant and adhere to the tenets of Islamic law, including the prohibition of interest and the avoidance of alcohol or gambling. Today, there are many Islamic indices being traded worldwide, among which the Dow Jones Islamic Market (DJIM) index is best known. Erkan argued that these are entirely the products of Western companies and that there is almost no company from an Islamic country among them. He said the İMKB has been holding talks with several companies authorized to devise indexes for technical advice.
Within the next month, the İMKB will meet with representatives of stock exchanges of Islamic countries in İstanbul to update them on the progress so far.
Underlining that Turkey has the largest capital markets among Islamic countries, Erkan said, “Therefore, it will be the nation that will get the largest share of an investment fund on the Islamic index.”
The İMKB president also mentioned developments in city indices, which the İstanbul bourse is creating for cities which have more than five companies whose shares are open to the public. Currently there are nine city indices. Erkan talked about several other cities with only four publicly traded companies in the İMKB who have index potential, such as Gaziantep and Konya, and noted that his administration will help these cities get more companies in the market and thus have an index of their own. An investor has the opportunity of becoming a partner of companies in his or her homeland if they purchase a fund based on the index of their cities. Erkan calls the city indices a method to encourage and urge people to come and invest in shares on the bourse.
