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Friday, February 22, 2008

Is the investment supporting violence?

Besides the usual inspection of a stock’s value and growth potential, independent broker N.V. Shah runs through an additional list of questions. Namely: Is the investment supporting violence?
“No matter what the upside, I do not invest in meat-packing companies, fishing companies or companies that manufacture fishing trawlers, nets, or guns,” says Shah, who has been investing on the Bombay Stock Exchange (BSE) since 1991. “Anyone who condones or incites violence is as guilty as the person actually committing the violent act.”
Shah is a strict adherent of ahimsa, the philosophy of non-violence. But unearthing investment-worthy companies that meet his criteria can be a difficult process—not to mention subjective.
Dow Jones and Co., a subsidiary of News Corp. and the publisher of The Wall Street Journal (WSJ) and the developer of multiple investment indices, hopes to change that with its Dow Jones Dharma Indexes. As Parliament prepares to debate an amendment to the Indian Trusts Act of 1882 that would allow temples and religious trusts to invest in the stock market, Dow Jones has launched the new index to guide investments in so-called dharma-compliant stocks.
WSJ has an exclusive content partnership in India with Mint.
Beyond religious institutions, index creator Dharma Investments is also reaching out to believers to help them become a part of the Indian stock market boom without compromising their religion. While similar to the Dow Jones Islamic Indexes, based on shariah or Islamic law, the new Dow Jones Dharma Indexes will conform to religious ideals of Hinduism and Buddhism, such as ahimsa and lok-samgraha, or leadership and social responsibility.
But with previous efforts to launch such ethical funds stalled and Hinduism and Buddhism not offering specific financial guidelines as the Quran does, experts wonder if it’s even possible to come up with a framework of principles. Investors themselves say they have devised largely individual codes of investment, filled with grey areas and ethical landmines.
For example, Vallabh Bhansali, promoter of Enam Financials, has a large stock research outfit, but doesn’t do research or recommend stocks of hotel, non-vegetarian food processing or cigarette companies.
Shah says he does not invest in Nestlé India because it sells chicken Maggi noodles. Venky’s (India) Ltd is off limits because the company sells meat. UB Group is also forbidden because it sells alcohol.
Via-Mint

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