New study focuses on quality of Shariah equity screening



SIRAJ WAHAB | Arab News Staff

Published — Monday 12 November 2012

Last update 12 November 2012 6:09 am

| نسخة PDF Print News | A A

ALKHOBAR: An indepth study, carried out by Ratings Intelligence, an organization that provides quality research resources for Islamic investors, has examined the quality of Shariah equity screening.
Authored jointly by CEO Dr. Mushtaq Shah, chairman Dr. Nabhan Al-Nabhan, and head of equity screening and audit Abdul Hadi Shaikh, the paper talks about how different results are obtained for a company under review by adopting different research approaches and how quality of Shariah screening can be improved.
The paper advocates an interactive, knowledge-based and Shariah board guided approach to Shariah equity screening. “The quality of equity screening is a key issue,” said Shaikh in a conversation with Arab News. “The Islamic equity fund industry derives credibility from such quality of screened data. Further, the GCC market has increasingly been seeking better research, as there is more awareness about Shariah funds in the region.”
According to Shaikh, Islamic equity funds are required to invest in such listed companies which are screened/examined and classified as Islamic using a Shariah equity screening criteria.
“Such screened/examined lists of companies are often provided by independent providers (ITES firms), international index providers as well as integrated Shariah advisory firms,” he said.
Shaikh described Shariah equity screening as a dynamic approach to determine if investment in the equity of a listed company is permissible from a Shariah perspective.
“Shariah Equity screening is guided by a Shariah equity screening criteria. Various scholars and group of scholars have laid such Shariah guidelines which govern Shariah equity screening. These broadly involve reviewing a company over its business sector and financial ratios,” he said.
Shaikh said screening and its methodologies are maturing with some index providers like the S&P following a “knowledge-based” approach. “This, I believe, is a step forward from the ‘information-based approach’ — which is an improvement over the automated approach — which most Islamic index screening providers use,” he added.
Shaikh is expected to explain in detail the paper during his presence at the two-day Islamic Finance News Saudi Arabia Forum 2012 in Riyadh beginning today.

What's happening around Saudi Arabia

JEDDAH: A small fire broke out on the roof of the Grand Mosque on Monday morning, causing minor injuries to five people, including members of the Civil Defense, one security officer and three workers. The fire broke out at about 2 a.m. and covered an...
JEDDAH: The director general of the Saudi Industrial Property Authority, Saleh Rasheed, has said that Sadeer Industrial City, which is regarded as one of the largest industrial cities in the Kingdom, possesses great capabilities that sets it apart as...
DAMMAM: Cheap and out of date cosmetics are causing serious health problems in the Kingdom, including skin diseases, hair loss and cancer, local doctors say.These products are often manufactured incorrectly or contain harmful fats, the doctors were q...
JEDDAH: Several young Saudis have started filming Jeddah’s historic district using cameras mounted on drones to gather professional 3D footage that can be used to build models and create virtual tours.Bandar Al-Mutlaq, owner of the Arab Foundation, w...
RIYADH: The Saudi capital is fully geared for this year’s Eid Al-Fitr celebrations that include an exciting bouquet of entertainment, heritage, sports, artistic and theatrical events.The annual Muslim festivities being organized here by the Riyadh mu...
JEDDAH: As part of its growing supervisory and investigative status, Riyadh Health Department’s forensics center examined 632 cases over the past eight months involving suspected murder, rape and abuse of women and children.Khaled bin Muhammad Hassan...
RIYADH: The Syrian Expatriates Medical Association (SEMA) expressed its thanks on Monday to Saudi organizations and individuals for donating to the campaign to help Syrians affected by the ongoing conflict.SEMA has 1,300 members in Syria and other co...
RIYADH: Inclusion of the Hail rock art in the UNESCO World Heritage List is proof of the Kingdom’s status and cultural profoundness, said the Saudi Commission for Tourism and National Heritage (SCTNH) on Monday.Reacting to the announcement of the fou...
JEDDAH: The Yemeni community has asked the Saudi government to extend the rectification process, which ends Tuesday, claiming that there are many thousands still seeking to get proper identification documents to qualify for work visas in the Kingdom....
JEDDAH: The Ministry of Municipal and Rural Affairs has set up 343 electoral constituencies for the Dec. 12 municipal council elections.This was done on the orders of Abdullatif Al-Sheikh, the minister and head of the General Committee for the Munici...
JEDDAH: Efforts are under way to electronically handle all Haj-related works to achieve speed and accuracy, as well as reduce costs an bring in transparency, Haj Minister Bandar Al-Hajjar has said.Speaking at a workshop in Jeddah on Sunday, Hajjar sa...
JEDDAH: The Board of Trustees of the King Abdullah International Foundation for Charity and Humanitarian Works on Sunday held its third meeting in Jeddah in the presence of Prince Khaled bin Abdullah, the board chairman, and Prince Miteb bin Abdullah...
RIYADH: The Ministry of Health has announced that six people were infected with the Middle East Respiratory Syndrome Coronavirus (MERS-CoV) in the period from June 28 to July 6.The ministry has now recorded 1,045 cases of MERS since June 2012, with 5...
ALKHOBAR: Patient visitations play an important role in the healing process, provided the well-wishers adopt the right approach by speaking and acting in a manner that the sick person’s morale is lifted. However, any wrong move by the visitor may aff...
MAKKAH: The price of residential land has registered a drastic 30 percent drop due to the slump in the market over the past six months, said an online newspaper.According to real estate dealers, the reason behind the decision was the imposition of 30...

Stay Connected

Facebook