Al Meezan Investments

Shariah Methodology

At Al Meezan, we are dedicated to providing Shariah compliant investment solutions. In this regard we adhere to the Shariah guidelines as advised by the Shariah Board. The investments are limited to asset classes approved by the Shariah Advisor and all companies under investment consideration are regularly screened for Shariah compliance.

Shariah Screening Criteria (for equity securities)

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 37%. 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-Compliant 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 25%. 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.

List of Shariah Compliant Companies for KMI-30 Index Recomposition (Updated December 2016)

S.NO SYMBOL COMPANY NAME STATUS DIVIDEND PURIFICATION RATE
1 ABOT Abbott Laboratories Compliant 1.62%
2 ACPL Attock Cement Compliant 0.86%*
3 ADAMS Adam Sugar Compliant1 0.14%
4 ADMM Artistic Denim Compliant 0.00%*
5 ADOS Ados Pakistan Compliant 1.95%*
6 AEL Arshad Energy  Compliant 0.00%*
7 AGIL Agriautos Industries Compliant 0.33%*
8 AGSML Abdullah Shah Ghazi Sugar Mills Compliant2 0.01%*
9 AGTL AL-Ghazi Tractors Compliant 0.94%
10 AKZO Akzo Nobel Pak  Compliant 0.98%
11 ALNRS AL-Noor Sugar Compliant1 0.22%
12 ALTN Altern Energy Compliant 0.42%*
13 APL Attock Petroleum  Compliant 0.73%*
14 ARPL Archroma Pakistan Compliant1 0.00%
15 ARUJ Aruj Industries Compliant 0.00%*
16 ASC Al Shaheer Corporation Compliant 0.05%*
17 ASRL Associated Services Compliant2 0.00%
18 ASTL Amreli Steels Compliant 0.02%*
19 ATBA Atlas Battery Compliant 0.79%*
20 ATLH Atlas Honda Compliant1 0.50%*
21 ATRL Attock Refinery Compliant 0.68%*
22 AVN Avanceon Limited Compliant 0.61%
23 BAPL Bawany Air Product Compliant2 0.03%
24 BCL Bolan Casting Compliant 0.09%*
25 BERG Berger Paints Compliant 0.80%*
26 BIFO Biafo Industries Compliant 2.00%*
27 BIPL BankIslami Pakistan Compliant 0.00%
28 BNWM Bannu Woollen Compliant 0.05%*
29 BPL Burshane LPG Ltd. Compliant 0.14%*
30 BRR B.R. R. Guardian Modaraba Compliant 2.28%*
31 BUXL Buxly Paints Compliant 0.10%*
32 BWCL Bestway Cement Ltd. Compliant 3.04%*
33 CEPB Century Paper Compliant 0.10%*
34 CHAS Chashma Sugar Compliant1 0.03%
35 CHCC Cherat Cement Compliant 0.33%*
36 CPPL Cherat Packaging Compliant 0.07%*
37 CSAP Crescent Steel Compliant 0.19%*
38 CSM Crescent Standard Modaraba Compliant 0.25%*
39 CWSM Chakwal Spinning Compliant 0.01%*
40 DAAG Data Agro  Compliant 0.00%*
41 DAWH Dawood Hercules Corporation Compliant 0.73%
42 DCL Dewan Cement  Compliant 0.03%*
43 DCR Dolmen City Reit Compliant 0.00%*
44 DFSM Dewan Farooque Spinning Compliant 0.17%*
45 DGKC D.G.Cement Compliant** 4.76%*
46 DSIL D. S. Industries Ltd Compliant 0.00%*
47 DYNO Dynea Pak Compliant 0.18%*
48 EFERT Engro Fertilizers Compliant 0.18%
49 EFOODS Engro Foods  Compliant 0.04%
50 ENGRO Engro Corporation Compliant 0.73%
51 EXIDE Exide Pakistan Compliant1 0.01%*
52 FATIMA Fatima Fertilizer Compliant 0.58%
53 FCCL Fauji Cement Compliant 0.07%*
54 FECTC Fecto Cement Compliant 0.34%*
55 FEROZ Ferozsons Laboratories Compliant 0.84%*
56 FFL Fauji Foods Limited Compliant 0.22%
57 FHAM First Habib Modaraba Compliant 0.02%*
58 FLYNG Flying Cement  Compliant 0.00%*
59 FML Feroze 1888 Mills Ltd Compliant 0.00%*
60 FPJM Punjab Modaraba Compliant 0.00%*
61 FRSM Faran Sugar Compliant1 0.08%
62 FUDLM First U.D.L. Modaraba Compliant 2.69%*
63 GAIL Ghani Automobile Industries Compliant 0.00%*
64 GAMON Gammon Pak Compliant 0.21%*
65 GGGL Ghani Global Glass Compliant 2.50%*
66 GGL Ghani Gases Ltd. Compliant 0.12%*
67 GHGL Ghani Glass Compliant 0.00%*
68 GHNI Ghandhara Industries Compliant 0.04%*
69 GHNL Ghandhara Nissan Ltd Compliant 0.16%*
70 GLAXO Glaxo Smith Kline Compliant 1.69%
71 GTYR General Tyre Compliant 0.01%*
72 GVGL Ghani Value Glass Compliant 0.09%*
73 GWLC Gharibwal Cement Compliant 0.02%*
74 HABSM Habib Sugar Compliant1 2.20%
75 HADC Haydery Construction Compliant 0.55%*
76 HAEL Hala Enterpries Compliant 0.67%*
77 HAL Habib ADM Ltd. Compliant 1.62%*
78 HASCOL Hascol Petroleum Compliant 0.14%
79 HCAR Honda Atlas Cars Compliant1 0.94%*
80 HINO Hinopak Motor Compliant1 0.80%*
81 HINOON Highnoon Laboratories Compliant 0.13%
82 HSM Hussein Sugar Mills Compliant1 0.01%
83 HSPI Huffaz Seamless Pipe Industries Compliant 0.00%*
84 HTL HI-tech Lubricant Compliant 0.82%*
85 HUBC Hub Power Company Compliant 0.18%*
86 IBLHL IBL HealthCare Ltd. Compliant 1.69%*
87 ICI I. C. I. Pakistan Compliant 0.02%*
88 ICL Ittehad Chemicals Ltd. Compliant 0.00%*
89 IMSL Imperial Sugar Compliant1 0.12%
90 INIL International Industries Compliant 0.01%*
91 ISL International Steels Compliant 0.01%*
92 JDMT Janana D Malucho Textile Compliant 0.02%*
93 JSML Jauharabad Sugar Compliant1 0.00%
94 JUBS Jubilee Spinning Compliant 0.35%*
95 JVDC Javedan Corporation Compliant 0.20%*
96 KEL K-Electric Ltd. Compliant2 1.19%*
97 KOHC Kohat Cement Compliant 1.41%*
98 KOHE Kohinoor Energy Compliant 0.02%*
99 KOHP Kohinoor Power Compliant 1.61%*
100 KOIL Kohinoor Industries Compliant 0.00%*
101 KSBP K.S.B. Pumps Compliant 0.07%
102 KTML Kohinoor Textile Compliant 0.81%*
103 LEUL Leather Up Ltd. Compliant 0.00%*
104 LINDE Linde Pakistan Ltd. Compliant 0.01%
105 LOADS Loads Limited Compliant 1.04%*
106 LOTCHEM Lotte Chemical Ltd Compliant 0.38%
107 LPL Lalpir Power Ltd. Compliant 0.12%
108 LUCK Lucky Cement Compliant 2.87%*
109 MACFL MACPAC Films Ltd. Compliant 0.00%*
110 MARI Mari Petroleum  Compliant 0.17%*
111 MEBL Meezan Bank  Compliant 0.00%
112 MIRKS Mirpurkhas Sugar  Compliant1 0.06%
113 MLCF Maple Leaf Cement Compliant 0.10%*
114 MTIL Mian Textile Compliant 1.05%*
115 MTL Millat Tractors Compliant 0.13%*
116 MUGHAL Mughal Iron & Steel Compliant 0.12%*
117 NATF National Foods Compliant 0.03%*
118 NETSOL NetSol Technologies Compliant 0.18%*
119 NICL Nimir Industrial Chemcials Compliant 0.01%*
120 NML Nishat Mills Compliant 4.89%*
121 NRL National Refinery  Compliant1 0.45%*
122 OGDC Oil & Gas Development Company Compliant 6.21%*
123 ORIXM Orix Modaraba Compliant 0.00%*
124 PAEL Pak Elektron Compliant 0.00%
125 PCAL Pakistan Cables Compliant 0.01%*
126 PICT Pak International Container Terminal Ltd. Compliant 0.60%
127 PIOC Pioneer Cement Compliant 0.18%*
128 PKGP Pakgen Power Compliant 0.02%
129 PKGS Packages Limited Compliant 0.13%
130 PMI Prudential Modaraba Compliant 0.24%*
131 PNSC Pakistan National Shipping Corporation Compliant 1.93%*
132 POL Pak Oilfields Compliant   1.43%*
133 POML Punjab Oil Mills Compliant 0.16%*
134 POWER Power Cement Limited Compliant 0.00%*
135 PPL Pakistan Petroleum Compliant 3.15%*
136 PSMC Pak Suzuki Compliant 0.97%
137 PSYL Pakistan Synthetics Compliant 0.25%*
138 PTC Pakistan Telecommunication Company Compliant 2.53%
139 RAVT Ravi Textile Compliant 0.00%*
140 REDCO Redco Textile  Compliant 0.01%*
141 RUBY Ruby Textile Compliant 0.00%*
142 SAPL Sanofi-Aventis Pakistan Compliant 0.14%
143 SAZEW Sazgar Engineering Compliant 0.00%*
144 SEARL Searle Company  Compliant 0.07%*
145 SHDT Shadab Textile Compliant 0.00%*
146 SHEL Shell Pakistan Compliant 0.09%
147 SHEZ Shezan International Compliant 0.03%*
148 SHFA Shifa International Hospital Compliant 0.69%*
149 SHSML Shahmurad Sugar Mill Compliant1 0.02%
150 SITC Sitara Chemical Compliant 0.11%*
151 SINDM Sindh Modaraba Compliant 0.00%*
152 SKRS Sakrand Sugar Mills Compliant1 0.00%
153 SMCPL Safe Mix Concrete Ltd Compliant 0.07%*
154 SML Shakarganj  Limited  Compliant1 0.26%
155 SNGP Sui Northern Gas Pipelines Compliant 1.39%*
156 SPEL Synthetic Products Enterprises Compliant 0.48%*
157 SPL Sitara Peroxide  Compliant 0.11%*
158 SRVI Service Industries Compliant 0.07%
159 SSGCI Sui Southern Gas Company Compliant2 1.90%*
160 STCL Shabbir Tiles Compliant 0.01%*
161 TELE Telecard Compliant 0.21%*
162 TGL Tariq Glass Compliant 0.07%*
163 THCCL Thatta Cement Company Compliant 2.93%*
164 TPL TPL Trakker  Compliant 0.87%*
165 TREET Treet Corporation Compliant 1.85%*
166 TRIPF Tri-Pack Films Compliant 0.03%
167 TRPOL Tri-Star Polyester Compliant2 0.00%
168 WAHN Wah-Noble Compliant 0.02%*
169 ZIL ZIL Limited Compliant 0.01%

Rates are calculated based on June 2016 accounts

Dividend purification rate means investors of the respective company should purify dividend income by the following formula:

Dividend income received x Dividend purification rate

*These are provisional rates for dividend purification which are subject to final adjustment on the basis of respective company’s annual accounts for the year 2017.
**Dividend purification rate of DGKC is calculated on the basis of additional information provided by the company.
***OGDC scrip has been considered compliant due to circular debt issue and restriction on sellling government securities. However, income from the scrip will be purified by charity rate mentioned.

  1. As per September 2016 accounts
  2. As per last available accounts