It has been reported that the Pakistan Index posted the highest first-half 2011 advance (as of the close of trading of June 28) of all the country indexes in the DJIM series.
In June, the DJIM Pakistan index achieved the second-highest monthly return, closing up 6.54% to 16,385.68, just behind the DJIM Philippines Index, which gained 7% to 1,953.46. These were the only advancing equity composites of the DJIM country indexes.
The Dow Jones Citigroup Sukuk Index was the third “highest” performer, finishing the month unchanged at 130.13. Pakistan has partly recovered from the tragic flood catastrophe in mid-2010 and the country is regarded as a causeway in Islamic finance -- bridging the Middle East with East Asia. The Karachi Stock Exchange has also been relatively unaffected by theconcerns over a possible government bond default in Greece.
The trouble around Greece has clearly affected European shares, whether Shari’ah-compliant or not. The Dow Jones Islamic Market Europe Titans 25 Index last month fell 5.33% to 2,242.54.
The index suffered from poor performances by DJIM Indexes covering Shari’ah-compliant Thailand (down 6.26% to 1,841.04) and Taiwan (down 7.40% to 5,155.74).
As a comparison, the Dow Jones U. S. Titans 50 Index ended down 3.42% to 2,330, while the bellwether Dow Jones Industrial Average declined 3% to 12,188.69.
Despite fears of a debt contagion contaminating financial Europe, there was some good news, at least for -importing countries. Oil prices dropped to a multi-month lows in June after the International Energy Agency released 60 million barrels of government-held reserves.
Consequently, the DJIM Oil and Gas Index declined the most among the sector indexes, falling 5.57% to 3,861.62. Nevertheless, Swiss private bank Sarasin’s Commodity Strategist Eliane Tanner expects oil prices to rise again in the longer term. “Chinese demand for oil grew on average by 11.4% in the first four months of this year compared with the same period in 2010,” she said. “Although industrial production has decreased somewhat over the past few months, other factors suggest demand from China will remain robust.”
Regarding the supply side, Tanner adds “the high-quality crude oil from Libya is likely to remain absent from the marketplace in the coming months. It is unclear when production and deliveries will resume, but as long as Muammar Gaddafi remains in power, a rapid improvement in the situation is not expected.”
With a loss of 2%, the DJIM Consumer Goods Index was the “best” performing industry composite, closing at 2,489.95. In order to give clients the chance to benefit from growing consumer purchasing power in Asia, Dubai Islamic Bank has provided access to the Prudential Shari’ah Opportunities - Asia Pacific Equity Fund.
The fund is benchmarked against the Dow Jones Islamic Market Asia Pacific ex-Japan Index, which finished June lower by 4.09% to 1,486.57.
June also saw the launch of the Dow Jones Global Commodity Equity 100 Index, the flagship of a new index series that measures the stock performance of companies engaged in the exploration or production of both scarce and renewable commodities.
Its sub-index Dow Jones Islamic Market Global Equity Commodity Index measures all companies from the parent index that pass Shari’ah screens. Both moves indicate that, despite the maturing of the Islamic finance industry, there is still much room for innovation and expansion. It also helps that the Sultanate of Oman recently legalized Islamic Banking, the final Gulf Arab state to do so.
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