STOCK SCREENING PROCESS- IFM

Stock screening process is the process of separating between Shariah compliant and non – shariah compliant stocks according to certain criteria set by SAC.

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Companies are listed under the Shariah compliant stock list if they pass at least one of the stages in the screening process.

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In the first stage of screening process, companies involving in hotel industry will automatically be eliminated from the shariah compliant stock list.

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The third stage of screening process involves determining the additional criteria for companies with mixed activities.

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Companies with pork and pork – related activities must have not more than 5% of the income out of the total income.

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The calculation for cash over total asset ratio include all cash owned by the company and placed in any accounts or instruments.

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Bursa Malaysia is the institution that screens stocks in Malaysia.

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For companies with mixed activities, the core activities must be very important and bring maslahah but there is no restriction on the proportion of the non permissible element.

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