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Shariah-compliant Stocks Underperform in 3rd Quarter

DUBAI — Shariah-compliant stocks underperformed the broader market in the Gulf countries, United States and Europe during the third quarter as Islamic investors remained on the sidelines while the financial sector rallied, according Standard & Poor’s.

The S&P Global BMI Shariah Index returned 15.46 per cent over the three months to September, as investors demonstrated renewed risk appetite for equities amid signs the global economy may be stabilising and bid financial 
stocks higher.

“Islamic banks and other financial institutions operating according to Shariah principles are continuing to underpin the performance of the S&P GCC Composite Shariah Index. However, with limited exposure to financials outside of the Gulf, Shariah investors are now missing out on some of the upside as the global economy recovers,” Alka Banerjee, Vice President Standard & Poor’s Index Services said.

The non-Shariah S&P Global BMI Index, which has a higher weighting towards financials, rose 18.67 per cent over the same period.