A TOTAL of four new securities trading in the local bourse qualified as compliant with Islamic principles of finance based on the operator’s review for the second quarter.

In a memorandum on its website Thursday, the Philippine Stock Exchange, Inc. (PSE) said a total of 53 securities were found Shari’ah compliant for the period ending June 25, 2020.

The number is higher by one against the 52 Shari’ah compliant securities listed for the period ending March, from which list three securities were pulled out.

The four new securities in the updated list are Metro Alliance Holdings & Equities Corp. (Metro Alliance) “A”; Metro Alliance “B”; PXP Energy Corp.; and SPC Power Corp.

The three that were removed from the previous quarter’s list are 2GO Group, Inc.; Italpinas Development Corp.; and Vivant Corp.

As in previous periods, the PSE said it tapped IdealRatings, Inc. to screen the listed companies for their Shari’ah compliance.

The PSE does this review on a quarterly basis to identify which securities follow the Islamic standards of finance, therefore allowing Muslim investors to participate in the local market.

In April, the bourse operator adjusted its screening guidelines to relax some restrictions in line with the amended Shari’ah Rulebook.

To be Shari’ah compliant, a company must not be involved in, or must derive less than 5% of its income from adult entertainment, alcohol, cinema, defense and weapons, financial services, gambling, gold and silver hedging, interest-bearing investments, music, pork and tobacco.

Companies must also pass a financial screening, which requires that a company’s interest-bearing debt and total interest-bearing deposits or investments do not exceed 30% of its 12-month trailing average market capitalization. — Denise A. Valdez