Standard & Poor's is launching a new index of Canadian companies that are compliant with Islamic Shariah law, the company said Wednesday.

The S&P/TSX 60 Shariah index will contain firms that engage in businesses acceptable to the Islamic legal code, Standard & Poor's said.

The religious criteria exclude businesses that sell products such as alcohol, tobacco and pork or engage in certain types of financial lending.

The new index will allow investors who hold stocks that reflect Islamic law to track the overall performance of their holdings, said Alka Banerjee, vice-president of S&P's index services.

"The index will create new opportunities for Islamic investors to benchmark their Canadian investments, and for asset managers to create new investment products serving the Islamic community," he said.

S&P used a Kuwaiti firm, Rating Intelligence Partners, to screen various companies for the new index.

With its Shariah indicator, Canada is up-to-date with other markets. S&P already has 24 similar indices, including in Europe and Japan.

Of course, following Islamic law has not proven to improve a portfolio's performance any more than other indices.

India's CNX 500 Shariah index, for example, stood at 981 in late May, down 21 per cent compared to the same month one year earlier.