Dow Jones Indexes, the US-based index provider, is to expand its Islamic Market Index series by launching the Dow Jones Islamic Market China Offshore Index.

The company says the Dow Jones Islamic Market China Offshore Index represents companies that have been screened for compliance with shariah principles and whose primary operations are in mainland China, but trade on the Hong Kong Stock Exchange, New York Stock Exchange, Nasdaq or American Stock Exchange.

Stocks included in the index are H shares, red chips, ADR/ADS and Chinese stocks listed in the US. The move is presumably designed to recognise the huge flows of Middle Eastern money currently flowing into the region and chasing Chinese investment opportunities.

Michael Petronella, president of Dow Jones Indexes, says: ôWhile China has experienced tremendous growth, the local Chinese market offers only restricted access to foreign investors. Investing in China offshore stocks is an attractive alternative.ö

He adds that the new index is designed to serve as a basis for investment products, including mutual funds, exchange-traded funds and other investable products.

Separately, both Dow Jones and British index provider FTSE announced component changes to key indices as a result of the flotation of Bank of China.

Dow Jones said as of the 5th June, Bank of China (H Shares) will replace BOC Hong Kong (Holdings) Limited in its China Offshore 50 Index.

The Dow Jones China Offshore 50 Index represents the largest, super-sector leaders of companies whose primary operations are in mainland China but trade at the Hong Kong Stock Exchange. Following its flotation, Bank of China now ranks among the top 25 by float-adjusted market capitalisation, which Dow Jones says qualifies it for the fast-entry rule.

FTSE, through its joint-venture with China media group Xinhua, also announced that Bank of China were added to both its China 25 and Hong Kong Index.

The FTSE Xinhua China 25 Index consists of the largest and most liquid Chinese companies classified as H shares and red chips.