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Shari’ah-compliant firms increase, says PSE

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THE Philippine Stock Exchange, Inc. (PSE) reported the number of listed firms compliant with Islamic principles of finance stood at 48 for the period ending Dec. 2019, up from 45 in the previous quarter.

The operator of the local bourse said in a Jan. 8 memorandum posted on its website that the number of Shari’ah-compliant securities grew by three as of Dec. 25, adding four new entrants and removing one from the previous list accounting for the period ending Sept. 25.

The new firms that made it to the list are AllHome Corp., Century Peak Holdings Corp., Marcventures Holdings, Inc. and Suntrust Home Developers, Inc.

The Shari’ah-compliant firm that was included in the previous list but did not make the cut for the updated one is AbaCore Capital Holdings, Inc.

The PSE said it tapped IdealRatings, Inc. to screen the listed firms and identify which of them are compliant with the principles of finance set by the Accounting and Auditing Organization for Islamic Finance Institutions.

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To become Shari’ah-compliant, a company must have less than 5% of its income derived 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.

It must also have its cash or interest-bearing deposits or investments not reaching more than 30% of its market capitalization, its interest-bearing debt also not going beyond 30% of its market capitalization, and its accounts receivables limited to 67% of its market capitalization.

The PSE screens listed firms that are compliant with the Islamic standards to open the market for Muslim investors that want to invest in the country. It said in its website that doing so will “help foster an ethical investment climate that provides opportunities for local Islamic investors to comfortably participate in the Philippine business community.” — Denise A. Valdez

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