Pakistan Stock Exchange (PSX) Limited has carried out the exercise of re-composition of PSX-KMI ALL SHARE ISLAMIC INDEX for the review period July 01, 2016 to December 31, 2016.
PSX has added 23 new companies into the All-Share Islamic Index in the latest re-composition exercise.
The recomposed PSX-KMI All Share Islamic Index of Pakistan will comprise of 249 companies, in aggregate, out of which 23 new companies have entered in the index. 14 companies have been removed from the Index.
The recomposed Index will be implemented w.e.f. November 20,2017.
The All-Share Islamic Index reflects the performance of Shariah-compliant shares in their entirety, because a separate index – KMI-30 Index is already in place to gauge the performance of the 30 most liquid Islamic stocks.
Major stocks that are going to be part of the All-Share Islamic Index include:
- Century Paper & Board Mills Ltd.
- DG Khan Cement Company.
- Nishat Mills, Loads Limited.
- Shataj Sugar Mills Ltd.
- Tri Pack Films.
- Nimir Industrial Chemical.
Major outgoing companies include:
- Johnsons and Philips ( Pakistan Ltd).
- Quice Foods Industries.
- Thal Limited.
- Crescent Cotton Mills Ltd.
- Rupali Polyester Limited.
There are six technical filters. The company should not be on the defaulters’ counter and that its securities should be available in the Central Depository System.
Shariah-screening also consists of six criteria. First and foremost of these criteria is that the core business of the company should not violate any principle of Shariah. The second condition states that the company’s interest-bearing debt to assets ratio must be less than 37%.
A company is also required to have its ratio of non-compliant investments to total assets at less than 33% in order to be part of the All Shares Islamic Index. Similarly, the ratio of non-compliant income to total revenue should also be less than 5%.
Rules also stipulate that the ratio of illiquid assets to total assets must be at least 25% while market price per share should also be at least equal to, or greater than, the net liquid assets per share.
The ratio of illiquid assets to total assets must be at least 25% while market price per share should also be at least equal to, or greater than, the net liquid assets per share.
The re-composition has been carried out on the criteria of selection of companies as detailed in the Brochure of PSX-KMI All share Islamic Index of Pakistan, which can be downloaded from the website of the Stock Exchange: www.psx.com.pk