Explore the exclusive opportunity to invest in Shariah-compliant US and HK stocks with M+ Global, the only broker in Malaysia offering Shariah screening.
1. Introduction to Shariah Stock
Shariah stocks are Shariah-compliant stocks.
As an initial screening, corporate activities that do not violate Shariah principles will be classified as Shariah-compliant securities.
Conversely, a company will be considered non-Shariah-compliant if it engages in the following main activities:
For those companies whose activities include both permitted and non-permitted activities, the mixed contribution from their permitted and non-permitted activities will be measured to the company's turnover and profits.
Securities will be classified as Shariah non-compliant if there have been contributions from non-permitted activities that exceed the Shariah benchmark.
2. How to identify Shariah-Complaint Stocks in M+ Global?
Go to Markets. Click on Shariah. Then you will see list of Shariah-Compliant stocks in the US Market / HK Market.
(i) What is the difference between Shariah-compliant classifications for trading instruments in Malaysia as compared to Hong Kong (HK) and the United States (US)?
For Malaysia, the Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) is the oversight body that supervises and monitors the Shariah-compliant status of public-listed companies on the Bursa Exchange. Under the Securities Commission Malaysia Act 1993, the SAC of SC shall be the authority for the ascertainment of the application of Shariah principles for the purposes of Islamic capital market (ICM) business or transaction and it was given the mandate to ensure that the implementation of ICM complies with Shariah principles.
However, for foreign trading or investing (eg. US and HK markets), there is no single regulatory entity to oversee the classification of Shariah-compliant instruments. Hence, there is no standardised classification for Shariah-compliant investments.
(ii) How does M+ Global offer Shariah-compliant classification?
M+ Global teamed up with IdealRatings Inc., a Shariah-compliant investment solutions provider to provide the Shariah classification.
(iii) Who is IdealRatings?
IdealRatings Inc. is a leading provider of Ethical and Shariah-compliant investment solutions serving top-tier investment firms, asset managers, brokerage firms, banks, stock exchanges, and asset owners globally in more than 30 countries. IdealRatings empowers its customers with accurate and up-to-date research information to help them make investment decisions according to their funds' ethical, socially responsible, and religious guidelines
M+ Global adopts the Assets-Market Cap Rulebook from IdealRatings.
(iv) What is the IdealRatings Asset-Market Cap Rulebook?
The IdealRatings Assets-Market Cap Rulebook offers a comprehensive framework that grants investors access to a broader selection of Shariah-compliant equities. This is accomplished by utilizing a divisor based on the maximum of a company's total assets or the average market capitalization, whichever is greater, in the calculation of financial ratios. This methodology expands the universe of eligible companies, particularly in sectors such as Technology and Software where companies fail the Shariah compliance due to the fact that the Market Capitalization of these companies is much bigger than the Assets in the balance sheet.
Additionally, this Rulebook provides more stability and avoids the bearish market volatility situations which would cause a company to fail the Shariah compliance due to changes in the market price which would affect the companies’ market cap. Therefore, this Rulebook provides a wider spectrum for a company to remain Shariah-compliant in either the bullish or bearish market conditions which would make it easier for the Investor to trade with peace of mind.
4. How to register an M+ Global Account?
You can explore the incredible perks you can unlock by using the invitation code “UBZQ" during registration.
Remember to put in my Invitation Code: UBZQ during the registration, to enjoy my services.
Thank you and have a nice day!