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Why some stocks like Wipro, Infosys are showing Non-Compliant which were Compliant or Mute earlier in IslamicStock Screener ?
Companies like Wipro and Infosys, among others, are now listed in the app as being non-compliant due to their services in the BFSI sector.
We were aware earlier, but since some people believe that Technology as A Service is open to everyone, hence we were Mute on it However, after extensive discussion with our Shariah Team, they advised treating income from these industries (BFSI) as non permissible
Then we added the earnings from the BFSI sector which were available in the latest annual report and that is why most of the stocks have become non-compliant.
Our Shariah team also said that “if one has invested in such stock, he should immediately sell it (whether at a profit or loss) and donate the profit to charity, because that company was essentially non-Shariah.” But we were considering it as Shariah based on our lack of knowledge or understanding.
And the ruling on any issue in Islam depends on the halal or haram of the issue per se, even if our thinking or understanding is contrary to it.”
ALLAH KNOWS BEST.
Good Content.
That’s good to know,
Also interested to know if there is a blog on how to screen Shariah financial ratio with example of every industry sectors,
This is because annual report of different sectors have different names/creteria like for example IT sector has BFSI…
Jazakallah khair..
What’s ISLAMICSTOCK`s view about Receivable Complaince and Cash Complaince. As per many of Shariah scholars, Chances of Non Halal incomes from there. But Islamicstock is silent about screening of Cash Complaince and Receivable Complaince.
Appreciate your detailed reply regarding the above.
First of all we appreciate your query. Before searching for a particular screening ratio, we should first see the screening method being followed. As you are well aware that screening methods are based on assets or on market cap with different permissible ratios as per the rulings being followed.
We at IslamicStock follow assets based screening method where fixed assets to total assets ratio is checked, which itself checks the limit of cash a company can have to remain compliant. Further, impermissible income to total income is calculated to check whether the non halal income of the company is within the permissible limit or not.
This screening method is neither silent nor avoids any required screening parameter, but does it differently from the market cap method.
What about working at such companies is it permissible to work at such companies ?
It’s better to ask to your local ulama.
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