Shari’ah-compliant firms increase

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The number of listed securities at the local bourse that are compliant with Islamic principles of finance grew to 52 in the period ending March 2020 from 48 in the last review.

The Philippine Stock Exchange, Inc. (PSE) released the list of Shari’ah-compliant firms on Tuesday to account for six new names and remove two securities.

The new ones are Axelum Resources Corp.; IPM Holdings, Inc.; ISM Communications Corp.; Italpinas Development Corp.; Pacifica Holdings, Inc.; and Zeus Holdings, Inc.

The securities that were removed are both from ATN Holdings, Inc. 

The PSE said it tapped IdealRatings, Inc. to screen listed companies for their compliance with the Accounting and Auditing Organization for Islamic Finance Institutions. 

The bourse operator does a quarterly evaluation of companies that follow the Islamic standards of finance with the goal of opening the market to Muslim investors.

To be 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.

Its cash or interest-bearing deposits or investments must also not reach more than 30% of its market capitalization, its interest-bearing debt must not go beyond 30% of its market capitalization, and its accounts receivables must be limited to 67% of its market capitalization. — Denise A. Valdez