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SEDCO's long-term vision embraces growth while adhering to Islamic guidelines, known as Shari'ah. In the realm of investing. Shari'ah rules forbid usury, interpreted as the payment or receipt of interest.
They also prohibit investment in certain industries, such as alcohol, gambling, weaponry, and tobacco. In that sense, they are similar to some faith-based investing guidelines in the United States. SEDCO's board of Islamic legal experts helps to determine whether investments are compatible with these requirements.
In addition, the guidelines involve a quantitative review. Investments cannot be made in a company that has debt financing, cash plus interest—bearing securities, or accounts receivable that are more than 33 percent of its market capitalization. Shari'ah also applies to trading and investing practices: an investor cannot borrow money on interest or make a short-term investment decision for purpose of speculation.
The Financial Investments Group's portfolio managers have pioneered the development of Islamic funds and equity investments that meet competitive risk and return expectations in accordance with Shari'ah.
But SEDCO does more than follow the tenets of Islam. It also sponsors academic research, symposia, and conferences on the development of markets and products for Muslim investors who seek to invest according to the Shari'ah codes. It is, for example, a major sponsor of the annual International Islamic Finance Forum in Dubai, which attracts hundreds of senior executives, academics, and other financial experts to debate the future development of this rapidly expanding financial sector. SEDCO also supports and participates in educational and research programs at Harvard University and other institutions. |
