Rossputin.com Rational Thinking About Our World

(H/T Delta Mike)

Starting Monday, a company called Javelin Funds has launched the first Shariah-compliant ETF (exchange traded fund), essentially a tradeable basket or index of 100 companies, based on – wait for it – the Dow Jones Islamic Market International Titans index maintained by Dow Jones & Co.

The index is made up of 100 companies outside the US whose practices are compliant with Sharia, meaning that “Excluded are companies engaged in the following lines of business: alcohol, tobacco, pork-related products, financial services, defense/weapons and entertainment. Also excluded are companies for which the following financial ratios are 33% or more: debt divided by trailing 12-month average market capitalization; cash plus interest-bearing securities divided by trailing 12-month average market capitalization; and accounts receivables divided by trailing 12-month average market capitalization.”

Here’s some other interesting information from Dow Jones:

The Dow Jones Islamic Market Indexes were introduced in 1999 as the first indexes intended to measure the global universe of investable equities that pass screens for Shari’ah compliance. With more than 100 indexes, the series is the most comprehensive family of Islamic market measures and includes regional, country, and industry indexes, all of which are subsets of the Dow Jones Islamic Market Index. An independent Shari’ah Supervisory Board counsels Dow Jones Indexes on matters related to the compliance of index-eligible companies.

There are currently more than 150 licensees with more than US$7 billion in assets benchmarked to the Dow Jones Islamic Market Indexes.

On another page, I found the list of the Shari’ah Supervisory Board members:

Shaykh Abdul Sattar Abu Ghuddah (Syria)

Dr. Abu Ghuddah is a senior Shari’ah Advisor to Albaraka Investment Co. of Saudi Arabia. He holds a PhD in Islamic Law. Dr. Abu Ghuddah has published many books on Islamic Financial transactions. He was an advisor for Islamic Law Encyclopeadia (Kuwait Awqaf Ministry). Dr. Abu Ghuddah is a member and chairman of several reputed Islamic Shari’ah Boards.

Shaykh Nizam Yaquby (Bahrain)

Mr. Yaquby is a member of the Islamic supervisory boards for several Islamic institutions, including the Arab Islamic Bank and the Abu Dhabi Islamic Bank. His work has appeared in the following publications: Risalah Fi al–Tawbah, Qurrat al–’Ainayn fi Fada il Birr al–Walidayn, Irshad al–’Uqala’ila Hukun al–Qira’h min al–Mushaf fi al–Salah, Tahqia al–Amal fi Ikhraj Zakat al–Fitr bi al–Mal.

Shaykh Dr. Mohamed A. Elgari (Saudi Arabia)

Dr. Elgari is an associate professor of Islamic Economics and the director of the Center for Research in Islamic Economics at King Abdulaziz University in Saudi Arabia. He is an expert at the Islamic Jurisprudence Academy (OIC), Economics. He is also an advisor to several Islamic financial instituitons worldwide and the author of many books on Islamic banking.

Shaykh Yusuf Talal DeLorenzo (United States)

Mr. DeLorenzo is considered a leading Islamic scholar in the United States. He has translated over twenty books from Arabic, Persian, and Urdu for publication in English and has been commissioned to prepare a new translation of the Qur’an. Mr. DeLorenzo compiled the first English translation of legal rulings issued by Shari’ah supervisory boards on the operations of Islamic banks. since 1989, Mr. DeLorenzo has served as secretary of the Figh Council of North America. He is also a Shari’ah consultant to several Islamic financial institutions and was an advisor on Islamic education to the government of Pakistan.

Shaykh Dr. Mohd Daud Bakar (Malaysia)

Dr. Bakar is currently a member of the Shari’ah Advisory Council of many financial institutions in Malaysia and around the world, including the Central Bank of Malaysia, Securities Commission of Malaysia, International Islamic Financial Market in Bahrain, Accounting and Auditing Organization for Islamic Financial Institutions in Bahrain and HSBC (Malaysia).

Are you kidding me? These guys are consultants to Dow Jones? Just a year ago, Dow Jones quietly removed one Sheik Muhammad Taqi Usmani from this Board. Apparently Usmani’s calls for Muslims to kill or enslave non-Muslims was inconvenient for Dow Jones’ brand image. The odds that one or more of the other Board members don’t have close ties to terrorist organizations borders on zero.

Yes, it might be argued that someone will do the business if DJ doesn’t, but even a dyed-in-the-wool capitalist must consider whether helping people who have sworn to kill you make money and spread their philosophy is wise.

It has been argued – and it makes sense to me – that Sharia finance is the jihadists’ nose into the tent of the world economy. Usmani’s participation is just one piece of evidence to bolster that reasonable assumption. Or HERE is one thing the Shariah-compliant profits might be buying. (Make sure you click on that link!)

There’s a very interesting (and not short at 62 minutes) presentation entitled “Sharia-complaint Finance: Benign? or Beligerent?” which I strongly recommend to anyone really interested in the subject. You can find it HERE.

I will research contact information for the CEO of Dow Jones & Company and update this note with that information when I have it. I will encourage you to contact him, as I will, to let him know that his company’s actions are aiding and abetting the most dangerous enemy this world has seen since Hitler – and possibly more dangerous than that. One would think that since the well-known conservative, Rupert Murdoch, now owns Dow Jones after its purchase by Murdoch’s News Corp., there should be at least a few sympathetic ears in the corporation. That said, I suffer no illusion that any amount of public outcry, much less the little that I can help muster, will cause them to get out of the Shariah-compliant finance business. All I can do is to avoid Dow Jones products as much as I can (difficult, given the importance of the Wall Street Journal) until they stop helping our sworn enemies.

If there is a bright side to all this, it’s that only $7 billion is so far indexed to these Dow Jones travesties. Let’s all do what we can to keep that number from getting bigger…not that we can do very much.