Sime Darby, Nestle (M) and Genting Plantations are among the top companies on the Socially Acceptable Market Investments Halal Food Index.
Kuala Lumpur: Malaysian listed food companies form over a third of the 274 companies in the newly-launched SAMI (Socially Acceptable Market Investments) Halal Food Index.
These 95 companies represent over two-fifths or US$53 billion (RM161 billion) of the index’s total market capitalisation of US$114 billion (RM345 billion).
Sime Darby Bhd, Nestle (M) Bhd and Genting Plantations Bhd are among the top companies on the index, Thomson Reuters global head of Islamic finance and OIC countries Rushdi Siddiqui said.
“This adds feather to Malaysia’s Islamic finance hub and the convergence of both (Islamic finance and halal industry),” he told a news conference on the sidelines of World Halal Forum (WHF) 2011 here yesterday.
Also present were Deloitte Malaysia global leader of Islamic finance Daud Vicary Abdullah, WHF director (Malaysia/the UK) Abdalhamid Evans and AmIslamic Funds Management chief executive officer Datin Maznah Mahbob.
Rushdi and Daud believe that the index will become a leading global index in less than five years.
“I think it’ll be two to three years before we see considerable traction in these areas,” Daud said.
According to IdealRatings, a syariah-compliant fund management services provider, the SAMI Halal Food Index has outperformed several leading global food indices during the most volatile period between March 2010 and March 2011 by 20 per cent.
The index – which comprises six sectors namely restaurants, non-alcoholic beverages, fishing, farming, food processing and food distribution – is championed by Rushdi in cooperation with IdealRatings and WHF.
Rushdi said if previously Muslim consumers invested in a company by buying its halal products, now with the index, they can invest in the company by buying the company’s shares. With greater liquidity, the company will grow and the spin-off will benefit the whole halal eco-system.
He said the index will be a bridge-builder for Islamic funds, exchange-traded funds and sukuk as well as for global non-Islamic investors interested in the emerging food sector, which is non-cyclical and of lower risk.
Rushdi, who refers both sectors as “twins separated at birth”, said Islamic finance is highly interested to finance the halal industry. “It is liquidity looking for opportunity,” he said.
Rushdi also said Malaysia, which had initiated International Financial Services Board (IFSB), can come out with a similar global industry body that sets the standards and principles for companies in the SAMI Halal Food Index series.
The world’s first Halal Food Index was unveiled at the opening of WHF 2011 by former Prime Minister Tun Abdullah Ahmad Badawi.
Abdullah said the initiative to merge the halal industry and Islamic finance will further entrench Malaysia’s leading position in thought leadership within the global halal industry.
“Halal and Islamic finance, two syariah-based trillion dollar industries, are growing at 15-20 per cent annually, with massive mainstream potential complementing each other perfectly,” he said in his address.