DGCX and Dow Jones Indexes Sign License Agreement to Launch New Futures Products

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The license agreement represents the commitment and collaboration between the two companies for DGCX to bring futures trading in regional and Islamic blue-chip indexes to the Middle East and for Dow Jones Indexes to make those indexes readily available in that market. The first product expected to launch on DGCX is the Dow Jones Islamic Market Titans 100 Index Future, which is subject to regulatory approval. The Islamic index represents the top 100 blue-chip, Shari’ah compliant stocks globally.

“This agreement with DGCX reflects growing investor interest in the Middle East generally and in Islamic finance, which in turn is increasing the demand for unique concepts and products in passive investing,” said Michael A. Petronella, president, Dow Jones Indexes. “The Dow Jones Islamic Market Titans 100 index is an ideal tool for measuring the performance of the largest 100 Shari’ah-compliant companies globally. Our Islamic index family is recognized worldwide as the standard in Shari’ah compliant investing,” Petronella added.

“We are delighted to collaborate with Dow Jones Indexes and to license indexes for new product launches in Dubai. The relationship represents an exciting time for DGCX as it looks to expand its reach and product suite across the region and internationally,” said Eric Hasham, chief executive officer, DGCX. “Since inception, DGCX has pioneered the development of the derivatives market in the Middle East. The world’s first Indian Rupee futures contract launched on DGCX in 2007 and in 2008, the exchange brought futures trading in the global energy benchmarks WTI Light Sweet and Brent Crude Oil to the region. The agreement with Dow Jones Indexes demonstrates that DGCX is once again developing new and innovative trading opportunities for its membership and customer base,” said Hasham.

Dow Jones Islamic Market Indexes:

To determine their eligibility for the Dow Jones Islamic Market Titans 100 Index, stocks are screened based on their industry type and their financial ratios. Excluded are companies engaged in the following lines of business: alcohol, tobacco, pork-related products, conventional financial services, defense/weapons and entertainment. Dow Jones Indexes then screens out companies with unacceptable financial ratios: companies whose total debt divided by trailing 24-month average market capitalization is 33% or more; those whose cash plus interest-bearing securities divided by trailing 24-month average market capitalization is 33% or more and those whose accounts receivables divided by trailing 24-month average market capitalization is 33% or more.

The Dow Jones Islamic Market Titans 100 Index is weighted by float adjusted market capitalization. Each component’s weight is capped at 10% of the index’s total free-float market capitalization to prevent dominance by any individual company.

While the underlying index is designed to be Shari’ah compliant, the futures contract would not be. Futures trading itself is not sanctioned by Shari’ah law.

The Dow Jones Islamic Market Titans 100 Index comprises the Dow Jones Islamic Market U.S. Titans 50, the Dow Jones Islamic Market Europe Titans 25 and the Dow Jones Islamic Market Asia/Pacific Titans 25 indexes.

The top five weighted companies in the Dow Jones Islamic Market Titans 100 and Dow Jones Islamic Market U.S. Titans 50 indexes are: Exxon Mobil Corp., Microsoft Corp., Johnson & Johnson, Procter & Gamble Co. and International Business Machines Corp.

The indexes are calculated in real-time and are distributed through major market data vendors. Historical data on the Dow Jones Islamic Market Titans 100 index is available back to December 31, 1995.

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. To determine their eligibility for the Dow Jones Islamic Market Indexes, stocks are screened based on their industry type and their financial ratios.

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