1. QE Al Rayan Islamic Index Press Briefing
January 2, 2013

2. Development of QE Al Rayan Islamic Index
Targeted towards Shari’a ETF launch
Index must be investable and tradable
Co-branded with Al Rayan Investment (ETF Issuer)
As per Shari’a screening methodology of Al Rayan Shari’a Board
Common to have customized indices for ETF development
Two stage index development process
Shari’a screening;
provided by product issuer as per respective Shari’a board
Index methodology; liquidity screening
A weighting scheme for the index has been customized to ensure both tradability and diversification across individual stocks and sectors. Qualifying stocks are ranked according to liquidity adjusted free float market capitalization and then a tiered-weighting methodology is applied where fixed allocations are assigned to individual sub-segments of the basket.

3. Main Features All stocks in the index are Shari’a compliant
Sector Allocation
All stocks in the index are Shari’a compliant
As per Shari’a Board of Al Rayan
Total Return index
Meaning the dividends are reinvested in the index
Review frequency: semi annual rebalancing
First business day of April
First business day of October
Launch date: January 7, 2013
Sector weightings as of October 2012 rebalance

4. Al Rayan’s Shari’a compliance methodology
Financial Screen
Total debt over total assets
Sum of a company’s cash and interest-bearing securities over total assets
Sum of a company’s accounts receivables and cash over total assets
None of the above mentioned financial ratios should exceed 33.33%
Sector Screen
Alcohol
Tobacco
Pork Related Products
Conventional Financial Services
Weapons
Gambling/Casinos
Music
Hotels (except Shari’a compliant hotels)
Cinema
Adult Entertainment

5. Weighting Methodology
Minimum size criteria: Based on free float weights of all Shari’a compliant stocks (with minimum 5% annualized share velocity), all stocks with weight greater than or equal to 0.5% will be included in the index.
Liquidity scaling: A liquidity scaling factor is to be applied to free-float market cap of the stocks whose free float to ADV ratio is less than the average of the index constituents. The factor is applied to reduce the free float of less liquid stock in the index to the effect that the new free float to ADV ratio is equal to index average.
Revised ranking: Liquidity scaling results in lowering the rank of less liquid stocks in the index basket.
Tiered Weight Structure: Further to above, customized weights are assigned to the index constituents to ensure diversification, such that;
weight of top component is 15%, 2nd 12%, 3rd 10%, next two 7.5%, next eight constitute 40% in total, 2nd smallest banding has 2.5% each and bottom two makeup 3%. The weight of the bottom three constituents may be diluted for any new addition to the index.

6. Constituent Weightings
Company
Index Weight (as of October 1st 2012 rebalance)
No of shares (effective Jan 7th 2013)
Indicative weight Jan 7th 2013
Industries Qatar
15.00%
95,030,553
17.07%
Masraf Al Rayan
12.00%
395,439,522
11.36%
Barwa Real Estate Co.
10.00%
302,164,945
9.61%
Qatar Islamic Bank
7.50%
86,823,369
7.57%
United Development Company
367,329,638
7.54%
Qatar International Islamic Bank
5.00%
85,381,857
5.17%
Qatari Investors Group
177,567,050
5.14%
Vodafone Qatar
489,772,851
4.97%
National Leasing
93,046,617
4.87%
Gulf Warehousing Company
111,007,047
4.81%
Al Meera Consumer Goods
27,209,603
4.74%
Mazaya Qatar Real Estate Development
377,706,182
4.73%
Qatar Meat & Livestock
61,901,846
4.22%
Medicare Group
2.50%
57,434,703
2.64%
Zad Holding Co.
38,755,939
2.38%
Qatar Islamic Insurance
1.50%
23,665,131
1.70%
Qatar Industrial Manufacturing Company
24,091,529
1.48%
Indicative weight Jan 7th is based on close price 31st Dec 2012