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Here is the updated list (as of September quarter 2014) of Shariah-compliant stocks, in accordance with Shariah compliance standards of the AAOIFI or the Accounting and Auditing Organization for Islamic Finance Institutions.

Note: This is a condensed version of the list found on this PSE link (memo). “The same list may be viewed in the PSE website under Products & Services > Shariah.”

You would notice that many popular/blue chip stocks are not included in the list. Why? Because Shariah compliance standards are tough. Check out the 4 criteria (verbatim, emphases are mine):

1. When a company’s primary business is NOT any of the prohibited activities (i.e. conventional interest-based lending, financial institutions, insurance, mortgage & lease, derivatives, pork, alcohol, tobacco, arms & weapons, embryonic stem-cell research, hotel, gambling, casinos, music, cinema and adult entertainment), and the total revenues derived by the company from these prohibited¬† businesses must NOT exceed 5%;
2. The interest-bearing debt does NOT exceed 30% against the 12-month trailing average market capitalization of the company;
3. The total amount of interest-bearing deposits/investments do NOT exceed 30% against the 12-month trailing average market capitalization of the company;
4. The accounts receivables do NOT exceed 67% against the 12-month trailing average market capitalization of the company.

Shariah-compliant stocks

Shariah-compliant stocks

 

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