Indonesia Stock Exchange Develops Sharia Capital Market

Jakarta, Aug 27 (Antara) - Indonesia Stock Exchange (BEI) has been developing sharia capital market industry in order to improve the growth of the domestic economy, Director of Capital Market Development of BEI Friderica Widyasari Dewi announced here on Wednesday. "We seriously encourage Islamic capital markets sector, as it contributes to the growth of the domestic economy," she noted. She pointed out that the Financial Services Authority has been preparing a blueprint for the Indonesian Islamic capital market. "This is expected to increase the value of investments and the number of local investors," she said. According to her, 307 of sharia stocks have been included in the Sharia Stock List (DES). In 2007, only about 172 were listed. "The number of shares included in the DES list has increased. It shows that the potential for the development of the Islamic capital market is quite open. The number of investors can grow through sharia approach," she explained. On the other hand, Islamic instruments are also considered to be one of the drivers of trust for foreign investors to enter the domestic market. Head of the National Sharia Council of Indonesia Ulemas Council (MUI) Ma`ruf Amin noted that the institution has also disseminated sharia capital market, so that people can understand the benefits of the investment. Sharia is the body of Islamic law. The term means way or path. It is the legal framework within which the public and some private aspects of life are regulated for those living in a legal system based on Islamic teachings. Sharia deals with various topics, including politics, economics, society, crime, and justice, as well as personal matters, such as prayer, everyday etiquette, fasting, sexual intercourse, hygiene, and diet. "An Islamic stock trading system is available at BEI, and it is wonderful, as we cannot find such systems in other stock exchanges," Friderica revealed. On March 8, 2011, MUI had launched a fatwa number 80 on the Application of Sharia Principles in Mechanism of Equity Stock Exchange Trade in Regular Stock Exchange, which has been approved by the National Sharia Council. "The fatwa helps BEI to introduce the sharia stock exchange to the public. MUI is entitled to establish the suitability of sharia through fatwas," she added. Meanwhile, Senior Deputy Governor of Bank of Indonesia (BI) Mirza Adityaswara noted that the development of the Islamic finance industry in Indonesia has been quite positive. The Islamic financial markets have also been helping the government to issue rates for funding. "The government requires funding for the state budget and sharia market assists by issuing the global rates," he said. He explained that BI had published a term deposit of foreign exchange for Islamic banks. By doing so, more choices are available for foreign exchange liquidity management instruments and hence enhance the role of the Islamic finance industry in financing economic growth. "We also have the support of the MUI. We have already conducted auctions for currency term deposits and the outstanding is approximately US$80-89 million," Mirza added.