KUALA LUMPUR, MALAYSIA, May 21 (Reuters) - Global index compiler FTSE and the Thailand stock exchange have launched a sharia stock index to meet demand for Islamic assets, FTSE said on Thursday.

The index uses asset-based debt screening, resulting in a less speculative methodology and ensures companies do not pass the criteria due to market cap fluctuations, FTSE said in a statement.

The index is screened by sharia consultancy Yasaar Limited, it said.

'This new index will serve both domestic and international investors looking to invest in a transparent and sharia-compliant manner, as well as help issuers create structured investment products tailored to the global Islamic market,' Stock Exchange of Thailand President Patareeya Benjapolchai said.

Apart from avoiding sectors such as weapons, alcohol, tobacco and pork-related products, a company's debt must be less than 33 percent of assets and cash and interest bearing items must be less than 33 percent of assets to qualify, FTSE said.

Accounts receivable and cash must be less than 50 percent of total assets and total interest and non compliant activities income should not exceed 5 percent of total revenue.

The stock exchanges of Malaysia, Indonesia and Singapore have established Islamic equity indexes.