KUALA LUMPUR (July 5): Bursa Malaysia Bhd and FTSE Russell have launched the FTSE4Good Bursa Malaysia Shariah (F4GBMS) index, which is is designed to track constituents in the FTSE4Good Bursa Malaysia Index (F4GBM) that are Shariah-compliant.

In a statement, Bursa Malaysia said the index comprises 54 constituents as of June 2021, and will be reviewed semi-annually in June and December. Screening will be based on the  Securities Commission Malaysia Shariah Advisory Council's methodology.

This new F4GBMS index will serve as a basis for fund managers to develop new investment products comprising a portfolio of shariah-compliant equities guided by sustainable investing principles, it said.

“We are pleased to offer a Shariah version of our respected F4GBM index, which has played an essential role in recognising public-listed companies that have taken steps to improve their ESG practices and disclosures.

“The launch of the F4GBMS index caters to the growing demand for Shariah-compliant investment tools. With the convergence between ESG and Islamic investing, this new index introduces a new dimension for local fund managers by embedding shariah principles into an ESG index,” said Bursa Malaysia chief executive officer Datuk Muhamad Umar Swift.

The index also highlights Bursa Malaysia’s commitment towards meeting the market’s indexing needs, as the bourse focuses on diversifying and expanding its index offerings to include more thematic and style indices, he said.

Helena Fung, head of sustainable investment, APAC, at FTSE Russell, said the FTSE4Good indices have provided investors with robust ESG benchmarks covering multiple equity markets including Malaysia.

“Widely tracked by ETFs and other passive vehicles, FTSE4Good indexes have a powerful track record of fostering improvements in corporate sustainability performance by increasing eligibility requirements over time.

“Working with our partners at Bursa Malaysia, it was important that we add shariah compliant versions of the popular FTSE4Good Bursa Malaysia Index to cater to investor demand for ESG and shariah compliant index solutions,” she said.