by Dylan Bowman Monday, 27 October 2008

NOT IMMUNE: Sharia compliant equities had $5.6 trillion wiped off their value in the third quarter. (Getty Images)

More than $5.6 trillion was wiped off the value of sharia compliant equities during the third quarter as markets nosedived due to the global financial crisis, Standard and Poor’s (S&P) said on Monday.

The ratings agency said the fall shows sharia investors are not immune to the global financial crisis, but that investors in equities that comply with Islamic law have benefited from their lack of exposure to financial stocks, which have been the focus of the market sell-off.

“While equity markets around the world have experienced a tumultuous quarter, sharia investors continue to be shielded to some extent by the exclusion from their portfolios of financial stocks and other highly leveraged companies, which do not satisfy the strict compliance criteria associated with Islamic law,” Alka Banerjee, vice president of S&P Index Services, said in a statement.

 

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