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 1.79%
2 ADAMS Adam Sugar Compliant1 0.01%*
3 AGIL Agriautos Industries Compliant 0.29%
4 AKZO Akzo Nobel Pak Compliant 0.96%*
5 ASC Al Shaheer Corporation Compliant 0.16%
6 AGTL AL-Ghazi Tractors Compliant 1.29%*
7 ALTN Altern Energy Compliant 0.81%
8 ASTL Amreli Steels Compliant 0.03%
9 ARPL Archroma Pak. Compliant1 0.57%*
10 ADMM Artistic Denim Compliant 0.00%
11 ASRL Associated Services Compliant 0.00%
12 ATBA Atlas Batteries Compliant 0.35%
13 ACPL Attock Cement Compliant 1.69%
14 APL Attock Petroleum Compliant 0.77%
15 ATLH Atlas Honda Compliant1 0.44%
16 ATRL Attock Refinery Compliant 0.72%
17 AVN Avanceon Limited Compliant 0.29%*
18 BIPL BankIslami Pakistan Compliant 0.00%*
19 BNWM Bannu Woollen Compliant 0.59%
20 BAPL Bawany Air Products Compliant 0.03%
21 BERG Berger Paints Compliant 1.66%
22 BWCL Bestway Cement Compliant 3.71%
23 BIFO Biafo Industries Compliant 1.38%
24 BPL Burshane LPG Compliant 0.29%
25 CHCC Cherat Cement Compliant 0.14%
26 CPPL Cherat Packaging Compliant 0.08%
27 CSAP Crescent Steel Compliant 0.65%
28 DSIL D. S. Industries Compliant 0.01%
29 DAWH Dawood Hercules Corporation Compliant 0.97%*
30 DCL Dewan Cement Compliant 0.04%
31 DFSM Dewan Farooque Spinning Compliant 0.29%
32 DCR Dolmen City Reit Compliant 0.00%
33 DYNO Dynea Pak Compliant 0.07%
34 ENGRO Engro Corporation Compliant 2.37%*
35 EFERT Engro Fertilizers Compliant 0.33%*
36 EFOODS Engro Foods Compliant 0.01%*
37 EXIDE Exide Pakistan Compliant1 0.01%
38 FRSM Faran Sugar Compliant1 0.05%*
39 FATIMA Fatima Fertilizer Compliant 0.05%*
40 FCCL Fauji Cement Compliant 0.55%
41 FFL Fauji Foods Limited Compliant 0.15%*
42 FECTC Fecto Cement Compliant 0.17%
43 FEROZ Ferozsons Laboratories Compliant 0.84%
44 FHAM First Habib Modaraba Compliant 0.46%
45 FLYNG Flying Cement Compliant 0.00%
46 GAMON Gammon Pak Compliant 0.24%
47 GTYR General Tyre Compliant 0.01%
48 GHNI Ghandhara Industries Compliant 0.02%
49 GHNL Ghandhara Nissan Compliant 0.33%
50 GAIL Ghani Automobile Industries Compliant 0.00%
51 GGL Ghani Gases Compliant 0.30%
52 GHGL Ghani Glass Compliant 0.00%
53 GGGL Ghani Global Glass Compliant 0.31%
54 GVGL Ghani Value Glass Compliant 0.10%
55 GWLC Gharibwal Cement Compliant 0.14%
56 GLAXO Glaxo Smith Kline Compliant 0.92%*
57 HAL Habib ADM Ltd. Compliant 1.52%
58 HASCOL Hascol Petroleum Compliant 0.08%*
59 HADC Haydery Construction Compliant 0.55%
60 HINOON Highnoon Laboratories Compliant 0.01%*
61 HINO Hinopak Motor Compliant1 0.74%
62 HTL HI-tech Lubricants Compliant 0.39%
63 HCAR Honda Atlas Cars  Compliant1 0.54%
64 HUBC Hub Power Compliant 0.14%
65 HSPI Huffaz Pipe Compliant 0.00%
66 ICI I. C. I. Pakistan Compliant 0.02%
67 IBLHL IBL HealthCare Compliant 0.64%
68 IMSL Imperial Sugar Compliant1 0.00%*
69 INIL International Industries Compliant 0.01%
70 ISL International Steels Compliant 0.01%
71 ICL Ittehad Chemicals Ltd. Compliant 0.00%
72 JOPP Johnson & Phillips Pakistan Compliant 0.01%
73 KEL K-Electric  Compliant2 1.19%
74 KSBP K.S.B. Pumps Compliant 0.05%*
75 KOHC Kohat Cement Compliant 2.25%
76 KOHE Kohinoor Energy Compliant 0.01%
77 KOIL Kohinoor Industries  Compliant2 0.01%
78 KTML Kohinoor Textile Compliant 0.19%
79 LPL Lalpir Power Compliant 0.01%*
80 LEUL Leather Up Compliant 0.01%
81 LINDE Linde Pakistan Compliant 0.02%*
82 LOTCHEM Lotte Chemical Compliant 0.27%*
83 LUCK Lucky Cement Compliant 1.34%
84 MACFL MACPAC Films Compliant 0.00%
85 MLCF Maple Leaf Cement Compliant 0.05%
86 MARI Mari Petroleum Compliant 0.37%
87 MEBL Meezan Bank Ltd. Compliant 0.00%*
88 MTL Millat Tractors Compliant 0.53%
89 MUGHAL Mughal Iron & Steel Compliant 0.16%
90 NRL National Refinery Compliant 0.84%
91 NATF National Foods Compliant 0.06%
92 NETSOL NetSol Technologies Compliant 0.29%
93 OGDC Oil & Gas Development Company Compliant 6.24%**
94 ORIXM ORIX Modaraba Compliant 0.00%
95 PNSC Pakistan National Shipping Corporation Compliant 2.30%
96 PTC Pakistan Telecommunication Company Ltd. Compliant 2.70%
97 PKGS Packages Ltd. Compliant 0.25%*
98 PCAL Pakistan Cables Compliant 0.01%*
99 PAEL Pak Elektron Compliant 0.00%*
100 PICT Pakistan International Container Terminal Compliant 0.68%
101 POL Pak Oilfields Compliant 1.13%
102 PPL Pakistan Petroleum Compliant2 4.03%*
103 PSMC Pak Suzuki Compliant 1.13%
104 PKGP Pakgen Power Ltd. Compliant 0.01%*
105 PIOC Pioneer Cement Compliant 0.88%
106 POWER Power Cement Limited Compliant 0.01%
107 POML Punjab Oil Mills Compliant 0.16%
108 QUICE Quice Food Industries Compliant 1.69%
109 RAVT Ravi Textile Compliant 0.00%
110 REDCO Redco Textile Compliant 0.01%
111 SMCPL Safe Mix Concrete Compliant 0.14%
112 SAZEW Sazgar Engineering Compliant 0.00%
113 SEARL Searle Company Ltd. Compliant 0.07%
114 SRVI Service Industries Compliant 0.20%*
115 STCL Shabbir Tiles & Ceramics Compliant 0.01%
116 SML Shakarganj Ltd. Compliant1 0.34%*
117 SHEL Shell Pakistan Ltd. Compliant 0.10%*
118 SHEZ Shezan International Compliant 0.03%
119 SHFA Shifa International Hospitals Ltd. Compliant 0.42%
120 SPL Sitara Peroxide Compliant 0.08%
121 SNGP Sui Northern Gas Pipelines Ltd. Compliant2 1.58%*
122 SSGC Sui South Gas Pipelines Ltd. Compliant2 1.90%*
123 SPEL Synthetic Products Enterprises Ltd. Compliant 1.03%
124 TGL Tariq Glass Industries Compliant 0.05%
125 TELE Telecard Ltd. Compliant 0.69%
126 THALL Thal Ltd. Compliant 4.78%
127 THCCL Thatta Cement Co. Ltd Compliant 0.74%
128 TPL TPL Trakker Compliant 0.99%
129 TREET Treet Corporation Compliant 1.13%
130 TRPOL Tri-Star Polyester Compliant 0.00%
131 FUDLM U.D.L. Modaraba 1st Compliant 2.35%

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 2016.
**OGDC scrip has been considered compliant due to circular debt issue and restriction on selling government securities. However, income from the scrip will be purified by charity rate mentioned.

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