SHARI’AH-COMPLIANT securities declined to 53 from the previous 56 following the quarterly review ending Dec. 25, according to the Philippine Stock Exchange, Inc. (PSE).
The updated list saw the addition of six companies and the removal of nine companies, the PSE said in a notice dated Jan. 8 on its website.
The additions to the list were Razon-led International Container Terminal Services, Inc. (ICTSI), Lucio Tan-led PAL Holdings, Inc., and AbaCore Capital Holdings, Inc.
Also included were Far Eastern University, Inc., Steniel Manufacturing Corp., and STI Education Systems Holdings, Inc.
The review saw the removal of companies such as APC Group, Inc., iPeople, Inc., Lodestar Investment Holdings Corp., Mabuhay Vinyl Corp., Marcventures Holdings, Inc., and Medilines Distributors, Inc.
Other omitted companies were Now Corp., SSI Group, Inc., and SFA Semicon Philippines Corp., which voluntarily delisted on Dec. 12.
The PSE released the previous list of Shari’ah-compliant securities on Oct. 4, covering the period ending Sept. 25.
“Shari’ah-compliant investment instruments create a mechanism for listed companies to gain access to potential funding from Islamic investors, including those in countries in the Middle East and other countries with high Muslim populations such as Malaysia and Indonesia,” the PSE said.
Shari’ah refers to the moral and religious code of Islam that covers rules, regulations, teachings, and values governing the lives of Muslims.
The quarterly review is done by Islamic finance information provider IdealRatings, Inc., which examines the adherence of the companies’ business activities and financial ratios to Shari’ah standards.
IdealRatings inspects listed companies in accordance with Shari’ah standards under the Accounting and Auditing Organization for Islamic Financial Institutions.
Under the business screening, the income of companies derived from activities such as adult entertainment, alcohol, cinema, defense & weapons, financial services, gambling, gold and silver hedging, interest-bearing investments, music, pork, and tobacco must be less than 5%.
In terms of financial ratio screening, a company’s cash or interest-bearing deposits or investments should not exceed 30% of its market capitalization, while its interest-bearing debt should not go beyond 30% of its market capitalization. — Revin Mikhael D. Ochave
