6 Rules of Stock Sharia Screening

According to IslamicStock

Let's Discuss one by one

the main business of the company cannot violate the Shariah, t is haram to invest in a company whose main business is alcohol, gambling, pork, night club activities

Rule 1

The Business

Income from non-sharia compliant investments should be less than 5 percent

Rule 2

Income From Non-Sharia’h Compliant Investments

Interest-bearing debt to total assets Should be less than 5 percent.

Rule 3

Interest-Bearing Debt To Total Assets

Illiquid assets to total assets ratio Should be at least 20% of fixed asset

Rule 4

Illiquid Assets To Total Assets Ratio

The next criterion pertains to the comparison between Net Liquid Assets and Market Capitalization. Before delving into the criterion itself, let’s understand its rationale.

Rule 5

Net Liquid Assets vs Market Capitalization

he final criterion in our rule set dictates that the ratio of non-compliant investments to total assets should be less than 33%.

6Rule 5

Non Compliant Investment to Total Asset should be less than 33%

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