SHARI’AH-COMPLIANT securities dropped to 47 from 53 after the quarterly screening for the period ending June 25, the Philippine Stock Exchange, Inc. (PSE) said.
The latest list, released on July 4, showed the removal of nine securities, the PSE said.
These included investment holding company AbaCore Capital Holdings, Inc.; educational institution Centro Escolar University; property developer DM Wenceslao & Associates, Inc.; investment holding company GEOGRACE Resources Philippines, Inc.; and Pangilinan-led power distributor Manila Electric Co.
Also included in the removals were petrochemicals company Metro Alliance Holdings & Equities Corp. “A,” Metro Alliance Holdings & Equities Corp. “B,” packaging company Steniel Manufacturing Corp., and investment holding company Zeus Holdings, Inc.
Securities added to the list were telecommunications provider Converge Information and Communications Technology Solutions, Inc.; mining company East Coast Vulcan Mining Corp.; and flour manufacturer Liberty Flour Mills, Inc.
The PSE issues the list of Shari’ah-compliant securities every quarter. The previous list was released on April 4, covering the compliance period ending March 25.
Shari’ah refers to the moral and religious code of Islam that includes rules, regulations, teachings, and values governing the lives of Muslims.
The market operator tapped the services of Islamic finance information provider IdealRatings, Inc. to screen listed companies in accordance with the standards for Shari’ah compliance under the Accounting and Auditing Organization for Islamic Financial Institutions.
Under the business screening, a company’s income derived from activities such as adult entertainment, alcohol, cinema, defense and weapons, financial services, gambling, gold and silver hedging, interest-bearing investments, music, pork, and tobacco must be less than 5%.
For 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 must not go beyond 30% of its market capitalization.
The PSE previously said that Shari’ah-compliant investment instruments allow listed companies to gain potential funding from Islamic investors, including those in Middle Eastern countries and other countries with large Muslim populations such as Malaysia and Indonesia. — Revin Mikhael D. Ochave
