Shariah compliance of stocks is done under the guidance of qualified and reputed Shariah experts. For stocks to be “Shariah compliant”, it must meet ALL the six key tests given below.
- Business of the Investee Company
Core business of the company must be halal and in line with the dictates of Shariah. Hence, investment in securities of any company dealing in conventional banking, conventional insurance, alcoholic drinks, tobacco, pork production, arms manufacturing, pornography or related activities is not permissible.
- Debt to Total Assets
Debt to Asset ratio should be less than 40%. Debt, in this case, is classified as any interest bearing debts. Zero coupon bonds and preference shares are, both, by definition, part of debt.
- Non-compliant Investments to Total Assets
The ratio of non compliant investments to total assets should be less than 33%. Investment in any non-compliant security shall be included for the calculation of this ratio.
- Non-complaint Income to Total revenue – Purification of Non-compliant income
The ratio of non compliant income to total revenue should be less than 5%. Total revenue includes Gross revenue plus any other income earned by the company. This amount is cleansed out as charity as a pro rata ratio of dividends issued by the company.
- Illiquid Assets to Total Assets
The ratio of illiquid assets to total assets should be at least 20%. Illiquid asset, here, is defined as any asset that that Shariah permits to be traded at value other than the par.
- Net Liquid Assets to Share Price
The market price per share should be greater than the net liquid assets per share calculated as: (Total Assets – Illiquid Assets – Total Liabilities) divided by number of shares.
| S No. |
List of Shariah Compliant Securities at the Karachi Stock Exchange for the review period ended 31 December 2010 |
| 1 |
Abbott Lab |
| 2 |
Agriautos |
| 3 |
Agritech Ltd. |
| 4 |
AL Noor Sugar |
| 5 |
Atlas Battery |
| 6 |
Atlas Honda |
| 7 |
Attock Cement |
| 8 |
Attock Petroleum |
| 9 |
Attock Refinery |
| 10 |
Bank Islami |
| 11 |
Bannu wollen mills ltd. |
| 12 |
BATA |
| 13 |
Baway Air |
| 14 |
BOC |
| 15 |
Bolan Casting Ltd. |
| 16 |
Claraint |
| 17 |
Clover |
| 18 |
Colgate |
| 19 |
Crescent Steel |
| 20 |
DGKC |
| 21 |
Dynea Pakistan |
| 22 |
Fauji Bin Qasim |
| 23 |
Fauji Fertilizer |
| 24 |
Fazal textile |
| 25 |
Ferozsons labs |
| 26 |
Flying Cement Company |
| 27 |
Gatron |
| 28 |
Ghandara Nissan |
| 29 |
Ghandhara Industries |
| 30 |
Ghani Automobile |
| 31 |
Ghani Glass |
| 32 |
Glaxo |
| 33 |
Habib ADM Ltd. |
| 34 |
Habib Sugar Mills Ltd. |
| 35 |
Highnoon Lab |
| 36 |
HinoPak Motors Ltd. |
| 37 |
Honda Atlas (car) |
| 38 |
HUB Power |
| 39 |
Huffaz Pipes |
| 40 |
IBL Healthcare |
| 41 |
ICI Pakistan |
| 42 |
Indus Dyeing |
| 43 |
Indus Motors |
| 44 |
KESC |
| 45 |
Kohat Cement |
| 46 |
Kohinoor Energy |
| 47 |
KSB Pumps |
| 48 |
LOTPTA |
| 49 |
Lucky Cement |
| 50 |
Maple Leaf |
| 51 |
Mari Gas |
| 52 |
Meezan Bank |
| 53 |
Mehran Sugar |
| 54 |
Millat Tractors |
| 55 |
Mirpurkhas Sugar Mills |
| 56 |
Modarba Al Mali |
| 57 |
National Foods Ltd. |
| 58 |
National Refinery |
| 59 |
Noon Pakistan |
| 60 |
OGDC |
| 61 |
Packages |
| 62 |
Pak Datacom |
| 63 |
Pak paper products |
| 64 |
Pak Suzuki |
| 65 |
Pakistan Synthetics Ltd. |
| 66 |
Pakistan Cables |
| 67 |
Pakistan Refinery |
| 68 |
Pakistan State Oil |
| 69 |
PICT |
| 70 |
PNSC |
| 71 |
POL |
| 72 |
PPL |
| 73 |
Premier Sugar |
| 74 |
PTCL |
| 75 |
Ravi Textile Mills Ltd. |
| 76 |
Saazgaar Engineering |
| 77 |
Safe Mix Concrete Products Ltd. |
| 78 |
Sana Industries Ltd. |
| 79 |
Sanghar Sugar Mills Ltd |
| 80 |
Searle |
| 81 |
Shahtaj Sugar |
| 82 |
Shell Gas LPG |
| 83 |
Shell Pakistan |
| 84 |
Shifa hospital |
| 85 |
Siemens |
| 86 |
Sitara Chemical |
| 87 |
Sitara Energy Ltd. |
| 88 |
Sitara Peroxide |
| 89 |
SNGP |
| 90 |
SSGC |
| 91 |
Suraj Cotton |
| 92 |
Tandlianwala |
| 93 |
Tariq Glass |
| 94 |
Tata Textile Mills Ltd. |
| 95 |
Telecard |
| 96 |
Thal Limited |
| 97 |
Thatta Cement |
| 98 |
Tri-Pack |
| 99 |
Unilever |
| 100 |
Wah Noble Chemical Limited |
| 101 |
Zil Limited |
| 102 |
Ghani gas Ltd. |
| 103 |
BRR Guardian Modarba |
These companies have been screened from the list of securities eligible for entry in KMI-30 as at December 31, 2010. For detailed KMI eligibility and selection criteria please see Sections 1.2 and 1.3 of the KMI Index brochure.