The Shari'ah Advisory Council (SAC) of the Securities Commission Malaysia approves and updates shares classified as Shari'ah compliant Securities, listed on Bursa Malaysia. The list is updated twice a year. The list provides investment reference for Islamic unit trust funds, Takaful funds, Islamic stock broking companies/services and investors looking for Shari'ah compliant investment. The list shall meet several objectives as follows:
The SAC screens listed shares based on certain methodology and the list is published twice a year. As a preliminary screening, companies which activities are not contrary to Shari’ah principles will be classified as Shari’ah compliant securities. On the other hand, companies will be deemed as Shari’ah non-compliant if they are involved in the following core activities
For companies with activities comprising both permissible and non-permissible activities, the SAC measures level of mixed contributions from permissible and non-permissible activities towards turnover and profit before tax of a company. The SAC uses benchmarks based on Ijtihad (Shari’ah based reasoning). Where the contributions of non-permissible activities exceed the benchmark, the securities shall be classified as Shari’ah non-compliant.
The SAC also looks at two additional criteria, namely public perception that the company must be good, and the core activities of the company are important and considered maslahah (benefit) to the Muslim generally and the non-permissible activities are very small and involve matters such as umum balwa (common plight and difficult to avoid), uruf (custom) and the rights of Muslim community which are accepted by Islam.
Please click here for more information.
Bursa Malaysia, in the context of Shari’ah screening process, has two comprehensive and transparent screening methodologies which are set up by SAC and Yasaar Ltd. These screening methodologies that look at both quantitative and qualitative measures help us meet local requirements and align us with international standards.
As at 25 May 2012, 825 securities are classified as Shari'ah compliant. They represent 89% of securities listed in Bursa Malaysia. Please click here for full list of Shari’ah compliant securities, which are marked by "[S]".
Bursa Malaysia has launched two indices to track the performance of Shari’ah compliant securities – the FTSE Bursa Malaysia EMAS Shari’ah Index (FBM EMAS Shari’ah) and FTSE Bursa Malaysia Hijrah Shari’ah Index (FBM Hijrah Shari’ah). They are designed for the creation of structured products, index tracking funds and ETFs or as a performance benchmark. The constituents are screened and tested on market capitalisation, free-float and liquidity.
The FBM EMAS Shari’ah is a benchmark index that applies the principles set out by the SAC. Companies that make up this index are those in FTSE Bursa Malaysia EMAS Index and whose business activities are not involved in:
Please click here for FBM EMAS Shari’ah factsheet.
These Shari’ah compliant companies are further filtered for FBM Hijrah Shari’ah. The screening methodology used is the one set up by Yasaar Ltd, a leading global Shari’ah consultancy, to meet the requirements of international Islamic investors. The largest 30 companies that make up the index must not be involved in:
Companies that have the following criteria are also excluded from the index:
Please click here for FBM Hijrah Shari’ah factsheet.