Shariah stocks!!!

This story comes up in Khaleej Times today.

Al Mal, the newly launched weekly financial paper in Abu Dhabi, cited a survey on 50 Muslim share investors showing that 18 per cent of respondents are staying away from non-Shariah-compliant companies during the month-long Muslim religious observance Ramadan.

The respondents to the poll are an ‘elite’ group of investors who keep a very large amount of money invested in portfolios at the Abu Dhabi Investment Exchange and the DFM.

The respondents said they would be taking their money out of stocks of the following companies, among others:

Emaar, a prominent property developer
Shuaa Capital
Mashreq Bank
Emirates Integrated Telecommunications Company
Abu Dhabi Commercial Bank (ADCB)
Al Wathba National Insurance Company

There is no word on what happens after Ramadan

continue at………
More re: Shariah Stocks
Equity Markets – HALALMONEY.ORG
HALALMONEY.ORG emphasizes that investment in Fixed Deposits, Bonds and Debentures are forbidden in Islam and offers Muslims an alternate and efficient means of Investment and Trading.

Most of the Financial Products currently available in the Indian Market are incompatible with Islamic Religious Principles and not fit for Muslims.

Islam forbids the receiving and paying of interest, and the involvement in companies having High Degree of Interest Income or High Debt or those involved in the business of Banking, Life Insurance, Alcohol, Tobacco, Gambling, Non-Halal Meat and/or Pornography. Muslims in India are currently forced to opt out of the Conventional Financial System or compromise their religious beliefs. Muslims aspire to invest in accordance with Islamic Principles but Investment Products and Services in India are invariably incompatible with Shari’ah principles.

Among Muslims in India, the Investment in Equities through the various Stock Exchanges is still in its nascent stage. Though the Indian Muslims are aware of the Investment opportunities in Equities through the Stock Exchanges, most of them prefer to stay away thinking that either it is risky and unsafe to invest in the Stock or they think it as a taboo. It is not so and it is necessary that every Muslim in India understands and comes forward to invest in Indian Equities Market.

India has the second largest Muslim population in the world. Muslims in India, have started understanding the Equities Markets and started participating in it. The Indian Stock Market has come a long way. The Securities Exchange Board of India (SEBI) is gearing up the Indian Capital Market towards Globalization through international standards and norms. Today the Indian Equity Markets are comparable to any leading markets of the World.

Hence the Equities Markets in India have a great potential. Even if a small percentage of Muslim population commence to understand the Financial and Religious benefits of Equity Markets then the Muslim Community will not lag behind others.

Accordingly before Investing in the Equities Markets the HALALMONEY.ORG chooses the Sharia Compliant Stocks and gives its Trading and Investent Advisory to its Clients.

Criteria used to filter out Sharia Stocks:Primary Filter – Industry (Excluded industries): 

1. Banks and NBFCs
2. Breweries
3. Chemicals – Alcohol-based
4. Cigarettes
5. Tobacco-Pan masala / Chewing tobacco
6. Distilleries
7. Entertainment-Excluding standalone news based
8. Leather
9. Sugar
10. Securities / Commodities Trading Services
11. Hatcheries

Secondary Filter – Financial Ratios:

1. Total Debt to Average Market Capital
<= 34.65% Margin of+ 5% of 33.33%
2 Cash and Interest bearing securities to Mcap
<= 34.65% Margin of+ 5% of 33.33%
3 Receivables to total assets
<= 47.25 Margin of+ 5% of 45%

Note: Market Cap is average of TTM ending on
31 Dec 2007

  Source Courtesy: Parsoli Corporation.  

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