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Istanbul stock exchange launches Islamic-style index

New index seen as effort to expand Islamic finance.

January 6, 2011 2:51 by

Turkey’s Istanbul Stock Exchange on Thursday launched an index comprised of 30 listed companies that comply with Sharia banking principles as the country seeks to attract interest in its burgeoning Islamic finance sector.

The Participation Index  will include discount retailer BIM , Turk Telekom , the main landline operator and builder Enka Insaat , said Avsar Sungurlu, deputy CEO of Bizim Securities, which is consulting for the index.

Bank Asya , an Islamic participation bank, and Emlak Konut , a real estate trust, are also among the index’s major holdings, Sungurlu said.

Turkey has four Islamic banks, part of a small but growing sector that offers Sharia-compliant finance aimed at boosting investment from the Middle East.

Lender Kuveyt Turk last year held the first issue of a three-year $100 million Islamic bond, or sukuk, known as a participation certificate.

The government has also issued revenue-indexed bonds that are linked to transfers to the Turkish Treasury from state companies, like the Turkish Petroleum Corporation and State Airport Authority.

(Reporting Seda Sezer, editing by Ayla Jean Yackley and Hans Peters)

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