By InvestAdvocate

Lagos (INVESTADVOCATE)-The Nigerian Stock Exchange (NSE) Wednesday said it has signed a Memorandum of Understanding (MOU) on Shari’ah Equity Index with Lotus Capital for the development and management of a certified Shari’ah Compliant Index.

This is contained in a Press Statement dated June 12 2012 by Wole Tokede, Head, Media Relations of the NSE and made available to www.investadvocateng.com in Lagos Nigeria.

“Another milestone aimed at further deepening the Nation’s Stock Market was attained in Lagos this week as The Nigerian Stock Exchange (NSE) signed a Memorandum of Understanding (MOU) with Lotus Capital for the development and management of a certified Shari’ah compliant Index. This bold initiative would increase the variety of investment classes in Nigeria as the   Islamic Equity Index joins the family of indices of The NSE” the Statement said.

According to the Nigeria’s Exchange, the Islamic Equity Index will be known as the “NSE Lotus Islamic Index” and will consist of Companies that are in conformity with the principles of Shari’ah.

The NSE affirmed that the index will increase the breadth of the Market and create an important benchmark for such investments as the alternative non-interest investment space widens. “It is the first index created to track the performance of Shari’ah Compliant Equities on the Floor of The Nigerian Stock Exchange” the Statement said.

Bola Adeeko, Chief of Staff/Head of Corporate Division of Nigeria’s Exchange at the signing in ceremony said the investment instruments like Exchange Traded Funds (ETF) can be built on the Index, and that investors with a preference for ethical/Shari’ah Compliant Investments can invest in same. ‘The signing of the MoU is a vital development step for the Market” Adeeko said.

He further affirmed that “The NSE Lotus Islamic Index” would further illuminate the massive investment opportunities available to ethically minded investors, both in Nigeria and overseas.

“All the Companies that will appear on the index have been thoroughly screened by Lotus Capital, in accordance with a methodology approved by a Shari’ah Board. Even after Companies are accepted into the Index, they will still be subject to periodic screenings to ensure their continued compliance. If any Company fails to meet the required standards, they will be removed from the Index” Adeeko said.

In the same vein, Hajara Adeola, Chief Executive of Lotus Capital after the signing in ceremony said many Ethical Investors are not sure whether they can invest in the Stock Market; but the NSE is taking a crucial step to make the Market more accessible and inclusive. “Whilst there are some Industries, such as Alcohol, “Interest Based” Financial Services, to name a few, these are clearly prohibited, there are several Companies that are suitable for investment by an ethically minded investor” she said.

Hajara Adeola said previously, an Individual or Corporate Investor would have to conduct thorough research and be knowledgeable in Shari’ah-law permissible investments in order to discern such suitable Companies. “With the advent of the NSE Lotus Islamic Index, more ethically minded investors will be able to easily and safely participate. This can only be good for the Nigerian Capital Market as it will attract more investors to our market” Hajara Adeola said.

She further affirmed that the “NSE Lotus Islamic Index” eliminates the research costs, and compliance concerns; an Ethical Investor was hitherto burdened with when creating an Islamic investment portfolio. “The Islamic Index also serves as a platform for creating more products like ETF and other Funds that are linked to the Index. This is an exciting development that is in line with the NSE mandate to broaden and deepen the Nigerian Capital Market.

Lotus Capital is a full-service, Halal Investment Management Boutique specialising in Shari’ah Compliant Asset Management, Private Wealth Management Advisory Services and Financial Advisory Services. It was founded in June 2004 with the specific objective of meeting the investment needs of ethical individuals, businesses, and organisations across West Africa.