Bonds of the Islamic type

A recent research project of a student involved Islamic finance. This is a financial system that operates according to Islamic law (which is called sharia) and is, therefore, sharia-compliant (background information). The project of the student focused on the Sukuk bonds (background information).
One of the few sources that carries information on bonds is Datastream. At first I tried to get the historical prices etc. through this system but I was only able to find approximately 100 Sukuk bonds by doing a very basic search on the text: Sukuk. Other search options did not seem to get me the specific Sukuk bonds.

I contacted the Thomson Reuters helpdesk and from their answers it is now clear that Datastream (at the moment) is not the best source for information on these bonds. The helpdesk literally said: “We have no specific data type for this. We have very limited coverage of this in Datastream.” and ““I have closely worked with our data team and can confirm that there are no plans to extend coverage in 2014. There are plans to add more markets in 2015 however.
That means, that, for now, Datastream is not an option. A second source on Bonds data, however, proved more useful: SDC Platinum’s Global New Issue database (recent name: Thomson One’s Deals database). In the GNI database I could find Islamic bonds using the variable “Islamic Finance Flag” (available through the All Items search tab). The variable allows you to select these types of bonds.

The variable definition according to SDC is: Islamic Financing Flag (Y/N): A yes/no flag to indicate where the Loan Type of Bond Security Type is Islamic Finance. Islamic Finance transactions are deals that prohibit the making or receiving of interest payments.  Trade financing for these transactions is obtained through the purchase of inventory that will be resold at a pre-determined price on a future date (or “Murabaha”).

Because I do not know all that much about Islamic Finance, at first I thought I needed to limit the search further in the GNI database to get the bonds. Using the variable “Security Type” it is possible to limit the search to Bonds. Using the variable the number of records was narrowed down by a factor of 20 an I was left with only 124. When I removed again the limitation and created a report that included the “Security Type” variable it was clear immediately that most Islamic Finance bonds also have the name “Islamic Finance” as Security Type. In the end I could find about 2450 bonds. The amount of data on these bonds is limited, however.

If you want to have additional historical time series data like prices, you will have to find another source for this. I have seen no examples but I have heard that Bloomberg might be an option.

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WorldScope coverage update 1st Quarter 2014

WorldScope company records now cover annual reports data for 75741 companies. This includes 46349 active and 29392 inactive companies. This update: 353 companies were added. Despite these additions the number of active companies in the database has gone down 39 from 46388 in November. This is the Fifth update in a row that the total number of active companies went down. WorldScope company records are available through Datastream and LexisNexis.

Today I have updated the WorldScope country coverage file and it now includes the latest update as it was posted in the first Thomson Reuters Infostream quarterly publication of 2014.

Major updated Countries (new records):
Australia (27)
Canada (20)
Hong Kong (22)
Japan (13)
South Korea (10)
United Kingdom (35)
United States (99)

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Directors, Board members & Committees in Europe

One of the few databases that cover information on directors and board members as well as some information on senior management staff for European companies is Amadeus. The Amadeus database covers listed and unlisted production companies. No financial type companies are covered here. Part of the information can be called up through separate report-presentations. When you have created a list and click on one of the company names you get the default company snapshot presented. Only when the snapshot is presented, is it possible to make a selection for the specific snapshot/report on board members, directors and management staff data.

There are two versions of the management report:

  • Report (Current Directors / Managers / Contacts)
  • Report (Previous Directors / Managers / Contacts)    .

See example screenshot:

Saving these reports with all the data is possible but the limit for downloading the data is: 50 reports at once. If you need reports for more companies you will need to export repeatedly in batches of 50 (1-50, 51-100, etc.). The data for each company will be presented in a separate tab/sheet in the Excel download file. Much depends on the company, whether board/directors/managers data is available. The origin of the data is usually the annual report, the company website or data from other news sources. The column with the name/header Body, indicates in what company bodies the person is active. Examples are:

  • AdmDep (Administration Department)
  • AudC (Audit Committee)
  • BoD (Board of Directors)
  • CoGoC (Corporate Governance Committee)
  • HR (Human Resources dept.)
  • NomC (Nomination Committee)
  • OthBC (Other Board Committee)
  • R&D (Research & Development)
  • RemC (Remunaration Committee)
  • SenMan (Senior Management)
  • SupB (Supervisory Board).

Important: The Report presentation does not allow you to export all data (including small biographies). You will have to change the list presentation to do this. Click on the option Columns (above the list) to elect and unselect variables/data for the download. Example screenshot:

NB: The database REACH is a database that covers all registered companies at the Dutch Chamber of Commerce (listed and unlisted). Depending on your subscription a module on Board members & Management may be included. If available this allows you to download similar board and Management data (as described above) for Dutch companies.

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Governance committees & historical membership

Most websites of companies list information on governance committees on their websites. Audit Analytics is one of the few databases that contains information on the members of these committees and the remuneration. One of the few databases that has any information on the historical changes in membership of these committees is LexisNexis. Like Audit Analytics, the database has the most information on US companies. The information on these committees is available through one of the US sources in lexisNexis.

The database/source is called: U.S. Executive Compensation Database.

The subdatabase you need is: U.S. Executive Compensation Database – Boards & Committees.

The way to search in this source in (the Academic version of) LexisNexis is as follows:

  • Start up LexisNexis and click the option Sources
  • Next click on: Find Sources
  • Type in the keyword field for: U.S. Executive Compensation Database
  • Click the red button: Find Sources

Example:

  • From the search result, mark the options:
    U.S. Executive Compensation Database – Boards & Committees
  • Click the red button: OK – Continue

Example:

  • In the search screen use the options to (example) find the CEO of Microsoft Corporation: Ballmer
  • Click the red search button

Example:

The search result will present an example of a report with data that can go back 10 years. See the example report that you can download here.

The information in the database report is taken from the SEC filings of a company in the EDGAR database.

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Governance committees & companies

Corporate governance in larger & public listed companies usually involves the formation of several internal committees. These specific committees are formed around specific separate governance issues and are generally composed of directors, supervisors and usually also include non-executives or non-board members. Over years the members change and the number of committees change. One person is often a member of more than one committee.

Examples of these committees are:

  • Audit Committee
  • Remuneration / Compensation committee
  • Corporate Responsibility Committee
  • Nominating & Corporate Governance Committee
  • Supervisory Committee.

On websites for larger companies it is often possible to find out who the current members are for each committee. You can also regularly find this type of information in the annual reports or annual reviews. One of the few databases that also list this type of information for many companies (mainly US), is Audit Analytics. The information is available when you click onwards (after a search) to the company snapshot. The quickest way to go there is:

  • Choose the sub-database D&O Changes (Directors & Officer changes) on the right side in the screen
  • Search by 1 or more tickers
  • At the bottom in the search result (list): click the name of a company

See example:

When you reach this point the screen shows the company data from the tabGovernance“. It is possible to click on the subtabCommittees“. There you will find the latest data on committee compositions and committee remunerations for a company (if available of course). See example:

If you need historical data you can use the link at the top to go all the SEC Filings. This link leads to the EDGAR database which has all available historical filings. The DEF 14A or 10-K/20-F filings usually have information on previous years for the committees.

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