Almaty, January 14th - The international trading platform ITS introduced today the region's first Shariah-compliant Exchange-Traded Fund (ETF), ITS Shariah (ITSS), marking a groundbreaking development in Central Asia and the Caucasus.
During its initial offering, investors purchased 500,000 shares of the fund at a price of $10, for a total of $5 million.
The ETF's primary listing took place the previous market day on the AIX exchange at the Astana International Financial Centre (AIFC).
Each ITSS share represents an equal stake in the Shariah-compliant ITSS ETF, registered as a separate legal entity at the AIFC under the principles of Islamic finance.
The ITSS fund is managed by IPS Capital, which operates as an Islamic window within the AIFC and has a Shariah Supervisory Board, headed by Mufti Muhammad Ibrahim Essa.
"Shares in the ITSS ETF offer access to a broad range of global halal stocks for experienced investors and professional managers. ITSS is a liquid and balanced instrument offering excellent sectoral diversification with a significant allocation of IT companies," explained the CEO of ITS, Chingiz Kanapyanov.
"The launch of this new instrument marks an important step in developing a new architecture for the financial system across the entire region,” he added.
The ITSS ETF's investment strategy is to replicate the holdings and performance of the ITS Shariah index as closely as possible.
Its portfolio consists of 30 of the largest global companies whose operations and finances meet the criteria set by the Accounting and Auditing Organization for Islamic Financial Institutions. The companies included in the ITSS ETF are selected and monitored on a daily basis by an independent and certified expert company, Sahih Invest.
The ITSS ETF is the second index fund in Central Asia established under the jurisdiction of the AIFC and traded on the ITS platform and the AIX exchange.
"The launch of the first Islamic index fund at the AIFC is an important step for developing Islamic finance in Kazakhstan and Central Asia. This instrument opens up new opportunities for market diversification, attracting sustainable investments and fostering trust among financial sector participants,” said Madina Tukulova, head of Islamic finance at the AIFC.
As of the start of trading, the ETF's holdings included global tech leaders such as Apple, Microsoft, Nvidia, AMD, and Tesla; the oil companies ExxonMobil and Chevron; the pharmaceutical giants Merck & Co, AstraZeneca, and Abbott Laboratories; the popular consumer goods manufacturers Procter & Gamble and Johnson & Johnson; the global payment systems Visa and Mastercard; as well as many other international companies.
Shares in the ITSS ETF are denominated in US dollars, with an initial price of $10 per share. Trading on ITS is available from 10:00 to 03:45 the next day, Astana time.
At the time of the fund's launch, the bid-ask spread for ITSS shares was around 5 basis points, or $0.005. The fund has a management fee of 0.5% per annum and is rebalanced on a monthly basis.
The fund's holdings, real-time performance, methodology and other documents are available on the ITS website.
About ITS
ITS is an international liquidity hub. Central to ITS's business model are the principles of best execution and smart order routing technology. These principles enable investors to execute securities transactions at the best prices available on the global financial market, regardless of the transaction volume. This technology ensures that the liquidity for foreign securities on ITS matches that of leading international platforms where these securities are traded.
ITS Central Securities Depository Limited, the central depository for ITS, offers depository services for the storage and settlement of securities. The depository has received Qualified Intermediary with primary withholding responsibility (WQI) status from the U.S. Internal Revenue Service (IRS).
Operating a clearing house that acts as a Central Counterparty, ITS assumes the counterparty role for all obligations of clearing participants and manages the clearing process for transactions on the ITS trading platform.
ITS also calculates its own indexes: the ITS World index (ITSW) and the ITS Shariah index (ITSS).
ITS's direct clients include professional securities market participants from Kazakhstan and other countries, such as financial intermediaries who are accredited and directly registered at the AIFC. Investors, both private individuals and legal entities, access trading through these financial intermediaries, such as brokers and banks.
ITS Press Service
Disclaimer
Investors should be aware that ETF shares and securities are risky assets. Past performance metrics are provided for reference only and are unable to forecast future results. The value of the shares in the ITS Shariah ETF may rise or fall, reflecting the performance of the underlying securities that make up the ITS Shariah holdings.
