PSE Finds 1 More Shari’ah-compliant Security Amidst Lockdowns

While major cities around the country are in lockdowns due to the CoViD-19 pandemic, the Philippine Stock Exchange (PSE) found 53 securities to be compliant with the principles of Islamic finance as of June 25, 2020, as indicated in PSE’s website. This number of Shari‘ah-compliant firms shows an increase of one firm, compared to the 52 firms that were listed during the previous review.

This new list of Shari‘ah-compliant firms issued by the PSE included five new entities, while four securities had been removed. The five new entrants are DITO CME Holdings Corp; Metro Alliance Holdings & Equities Corp A and B; PXP Energy Corporation; and SPC Power Corporation.

As a measure to attract Muslim investors inside and outside the country, the PSE carries out quarterly evaluation of its listed Shari‘ah-compliant entities in order to ensure compliance with the Accounting and Auditing Organization for Islamic Finance Institutions (AAOIFI).

In order for a company to be listed as a Shari‘ah-compliant entity, it must have less than 5% of its revenues generated from businesses in conventional interest-based lending, financial institutions, pork, alcohol, intoxicants, tobacco, arms and weapons, gambling, casinos, derivatives, adult entertainment, music, and human stem-cell research. In addition, its cash or interest-bearing deposits shall not reach more than 30% of the company’s market capitalization while accounts receivable must be lower than two-thirds of its market capitalization.

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