IslamiQ alters stock screening methodology

IslamiQ, an online service dedicated to meeting the Islamic investment and financial needs of the global Muslim community, announced enhancements to its ScreenIslamiQ methodology.

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By  Vijaya George Published  December 10, 2001

IslamiQ, an online service dedicated to meeting the Islamic investment and financial needs of the global Muslim community, announced enhancements to its ScreenIslamiQ methodology.

ScreenIslamiQ, a four-stage screening process that identifies active listed companies, which comply with Shari'ah guidelines, has been developed by IslamiQ's Shari'ah board.

"The changes to ScreenIslamiQ will make it an even more discerning means of screening permissible equities, which will of course strengthen investor confidence in the long term credibility and applicability of the ScreenIslamiQ methodology," said Dr Hasnita Hashim, CEO, IslamiQ. ScreenIslamiQ, which forms part of IslamiQ's complete Islamic wealth management service, is available only to subscribers.

The ScreenIslamiQ methodology will include an additional filter to assess a company's exposure to the receipt of interest. The filter will limit a company's cash in interest-bearing deposits or investments in interest-generating securities or instruments to 30% of its 12-month trailing average market capitalisation. As a result of this change the second stage of the screening parameter will now not only involve an assessment of the company's non-halal income, but has also been expanded to include its ability to generate such income.

A second change includes a refinement to the leverage-screening filter, with the interest-bearing debt of the company now measured against its market capitalisation rather than total assets. This filter will therefore ensure that the interest-bearing debt of a company should not exceed 30% of its market capitalisation.

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