Now that Dow Jones, publisher of the Wall Street Journal, may be sold to Rupert Murdoch's New Corporation, which has a very significant Saudi shareholder in the person of Prince Al-Waleed bin Talal, it is worthwhile looking at the practices of the company. For example, look at the web page which describes the Dow Jones Islamic Market Indexes.
The Dow Jones Islamic Market Indexes were introduced in 1999 as the first benchmarks to represent Islamic-compliant portfolios. Today the series encompasses more than 70 indexes and remains the most comprehensive family of Islamic market measures.
The indexes are maintained based on a stringent and published methodology. An independent Shari`ah Supervisory Board counsels Dow Jones Indexes on matters related to the compliance of index-eligible companies.
Excluded from the indexes are producers of alcohol and pork-related products, providers of conventional financial services (banking, insurance, etc.) and providers of entertainment services (hotels, casinos/gambling, cinema, pornography, music, etc.). Tobacco manufacturers and defense and weapons companies, although not strictly forbidden for investment under Islamic Law, are excluded from the indexes as well.
In addition to the industry screens, stocks are also subjected to a series of financial-ratio screens to remove companies based on debt and interest income levels.
Hat tip: reader Robert B.