Egypt association plans list of Islamic stocks

An Egyptian association plans to launch a list of sharia-compliant equities next week as part of its efforts to raise awareness of Islamic finance in the country.

The list will filter out companies which fail to meet religious guidelines, such as avoiding excessive levels of debt and steering clear of industries that are deemed unethical, including alcohol and gambling.

"The association has put the finishing touches to a set of standards and controls for the index prior to launch," Mohamed El-Beltagy, head of the Egyptian Islamic Finance Association, told Reuters by telephone.

Details of the stock list will be announced next week, giving investors assurance about the stocks that they can legitimately buy and sell, he added.

The organization’s sharia board will approve 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.

Last month, officials in the Egyptian association said the country's listed companies must 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. 

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