PSE Keeps 54 Shari’ah-compliant Securities Amidst Lockdowns

Ticker Board at the Trading Room of the Philippine Stock Exchange

As major cities around the country have been in Covid-19 lockdowns since mid-March this year, the Philippine Stock Exchange (PSE) found 54 securities to be compliant with the principles of Islamic finance as of September 25, 2020, as indicated in PSE’s website. This number of Shari‘ah-compliant firms shows an equal number of firms that were listed during the previous review.

This new list of Shari‘ah-compliant firms issued by the PSE included eight new entities, while an equal number had been removed. The eight new entrants are Altus Property Ventures, Inc.; Basic Energy Corporation; Cyber Bay Corporation; Kepwealth Property Phils., Inc.; LMG Chemicals Corporation; PAL Holdings; Primex Corporation; and Vulcan Industrial & Mining 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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