The index takes the constituents of the FTSE Bursa Malaysia EMAS Index, which has been free float weighted and liquidity screened, and overlays the Securities Commission’s Shariah Advisory Council’s (SAC) screening methodology to derive a highly investable and transparent Shari'ah-compliant index.

The new index will run parallel with the existing Shari'ah index (KLSI) for nine months. The KLSI will be deactivated on 1 November 2007, making the FTSE-Bursa Malaysia EMAS Shari'ah Index the singular benchmark index for Malaysian Shari'ah-compliant investments.

Bursa Malaysia’s Chief Executive Officer, Dato’ Yusli Mohamed Yusoff said: “The new index provides investors with a clearer picture of quality Shari'ah investments in the Malaysian market. It uses globally-adjusted criteria that make it easier for institutional investors to track our Shari'ah-compliant investment offerings more effectively. This is critical to ensure our Shari'ah market continues maintaining its competitiveness with other international Shari'ah investment destinations.”

He added that the new index also represents a first step towards the creation of more Islamic products. “With the new FTSE Bursa Malaysia EMAS Shari'ah Index, we can now work on creating a tradable Shari'ah index which in turn allows us to introduce Islamic structured products.”

Paul Hoff, Managing Director of FTSE Asia Pacific observed that: “The FTSE Bursa Malaysia EMAS Shari'ah Index is a superior Shari'ah-compliant benchmark for the Malaysian market due to its investability, liquidity and transparent ground rules. This overlaid with SAC’s screening methodology is expected to attract domestic and foreign Shari'ah investors alike.”

The screening methodology applied by the SAC stipulates that stocks must not be involved in activities deemed non-permissible according to Shari'ah. Constituents from the FTSE Bursa Malaysia EMAS Index, a composite of the large and mid-cap stocks of the FTSE Bursa Malaysia 100 and the FTSE Bursa Malaysia Small Cap Index, which do not meet the SAC’s Shari'ah standards are excluded. The result, the FTSE Bursa Malaysia EMAS Shari'ah Index will be managed according to a transparent and public set of rules and overseen by an independent committee, who will meet semi-annually to review the index.