PSE Finds 63 Shari’ah-compliant Securities in 2ndQ 2022

The Phiilippine Stock Exchange (PSE). (c) Philippine Star.

By Mansoor Limba

As the country transition to having a new President and hopes to exit from the pandemic lockdowns amidst the oil price hike and the ongoing Russia-Ukraine War, the Philippine Stock Exchange (PSE) found 63 securities to be compliant with the principles of Islamic finance as of June 25, 2022, as indicated in PSE’s website. This number of Shari‘ah-compliant firms shows a decrease of five companies compared to the previous quarter’s list of 68 (see “PSE Finds 3 More Shari’ah-compliant Securities in 1stQ 2022,”

This new list of Shari‘ah-compliant firms issued by the PSE included five entities that were not included in the previous quarter’s list, viz., Conception Industrial Corporation, Marcventures Holdings, Inc., Medilines Distributors Incorporated, SFA Semicon Philippines Corporation, and Victorias Lilling Company, Inc.

Ten firms, meanwhile, were delisted, viz., ACE Enexor, Inc., Bogo-Medellin Milling Co., Inc., Far Eastern University, Global Ferronickel Holdings, Inc., LMG Corp., Macay Holdings, Inc., NiHAO Mineral Resources International, Inc., Oriental Peninsula Resources Group, Inc., Primex Corporation, and Vistamalls, Inc.

As a measure to attract Muslim investors inside and outside the country, the PSE carries out a 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.

Representing various sectors such as equity, financials, holding firms, industrial, mining and oil, property, services, and small, medium, and emerging (SME) boards, these Shari‘ah-compliant firms are the following:

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