PSE postpones Shariah sub-index project
MANILA, Philippines – The Philippine Stock Exchange's (PSE) plan to launch a Shariah Compliance Index has been stalled anew, as the head of the local bourse said the project would require more spending.
“We postponed the index... because we have to spend more,” PSE president and CEO Hans Sicat told reporters on Friday, January 9.
The PSE aimed to launch the Islamic sub-index in 2014, with the hope to provide the exchange with a share of the $1.5-trillion funds provided by Muslim investors.
Through a partnership with IdealRatings Inc., the sub-index would sort companies compliant to the standards set by the Accounting and Auditing of Islamic Financial Companies.
Shariah compliance would mean a listed firm must have no businesses in convetional interest based lending, financial institutions, pork, alcohol, intoxicants, tobacco, arms and weapons, gambling, casinos, derivatives, pornography, music/entertainment, and human stem-cell research.
The screening involves looking at a company’s financial ratios of cash and interest-bearing investments not exceeding 30%, interest-bearing debts not exceeding 30% and accounts receivables not exceeding 67% of market capitalization.
“We’re going to re-stack the projects (whether) which comes first,” he said.
For now, PSE will continue listing Shariah-compliant firms while the launch of the sub-index has been postponed anew.
At least 47 listed companies made it the the Shariah law-compliant sub-index in 2013. – Rappler.com