MUMBAI, Feb 18 (Reuters) - India's Taurus Asset Management will launch a sharia-compliant equity fund on Thursday, joining the likes of Benchmark Asset Management and HSBC HSBA.L who have introduced such products this year.
The fund house has roped in India’s Taqwaa Advisory and Shariah Investment Solutions, an independent Sharia board, to monitor its investments.
Islamic investing forbids Muslims from receiving interest payments and investing in companies involved in the production or sale of pork, alcohol, tobacco, pornography, gambling and non-Islamically structured finance or life insurance.
India, home to one in every six human beings on earth, has the world’s third-biggest Muslim population after Indonesia and Pakistan, a market that local money managers are looking to tap.
“We actually see a huge untapped market in India,” Head of Equity Mohit Mirchandani told reporters, adding Taurus Ethical Fund, India’s first Sharia-compliant actively managed mutual fund, would invest in a portfolio of 25-40 stocks.
"It is an investment concept which is gaining ground," said Mirchandani, who joined Taurus from the Indian fund unit of ING Group ING.AS this month.
Asia’s third-largest economy, expected to grow at 7.1 percent in 2008/09 when large parts of the world are in recession, also offers far more sharia-complaint stocks than predominantly Islamic countries, a potential lure for global investors.
About 70 percent of the stocks listed on the Bombay Stock Exchange are Sharia-compliant, and make up almost 60 percent of the market capitalisation of nearly $600 billion, according to Islamic broking firm Parsoli.
Taurus estimates Islamic investments at nearly $65 billion globally, with nearly half of this amount invested through mutual funds and hopes Indian money managers would raise at least about $1 billion from a large Muslim population. (To read more Reuters stories on Islamic finance, click on [ID:nISLAMIC]) (Reporting by Nishant Kumar; editing by Rohini Ananthan)
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