Shariah compliant status of stocks is Dynamic or static?
Blog.Islamicly.com

Shariah compliant status of stocks is Dynamic or static?

Do companies change their Shariah compliance status often or their Shariah compliance status remains the same?

A listed stock is classified as Shariah compliant if it passes the Shariah Screening Criteria. See here for detailed Shariah screening criteria: Shariah Screening Criteria
As you can see there are two factors which effect the Shariah compliance of companies:
1. Business activity of the company
2. Financial ratios of the company.
Since the business activity and revenue composition of companies can change every quarter, it can affect the Shariah compliance status of the company.
Also, since the financial ratios are a combination factor of actual reported numbers of the company as well as the market price of the company; both of which are dynamic and changing, Shariah compliance of the stock also changes with the underlying change in these two factors.

Hence, it can be concluded that Shariah compliance of listed stocks is not static and keeps changing.
It is important to track these changes in compliance and ensure your investments are always in compliance with Shariah Islamicly helps you in ensuring your stock holding is always in compliance with Shariah.

How often does Companies change Shariah compliance?
Changes due to business activity:
Companies disclose a summary of revenue details every quarter while a more detailed break up is provided in its annual report. If a company starts a new non-permissible business activity which contributes more than 5% of its total revenue, the company can become non-compliant due to changes in its non-permissible business activity. This change can occur after its quarterly or annual numbers are disclosed.
However, it’s more likely to affect the company annually as revenue details are more elaborately available annually.

Islamicly updates the compliance status of stocks on a daily basis, hence tracking if any company’s business activity composition has changed.

Changes due to financial ratios:
i. Changes due to fundamental financial numbers: Every quarter the company discloses its financial numbers. If these numbers change, it may affect the compliance of the stock if it breaches the threshold with the new numbers.
ii. Changes in market capitalization of the company: As trading takes place, price of the stock changes every day. If the company’s stock price falls, it results in its market cap falling and may lead to breach in financial ratios making the stock turn non-compliant. The effect could be inverse as well, resulting in non-compliant stocks turning compliant.

Islamicly updates the compliance status of stocks on a daily basis, hence tracking if any company’s business activity composition has changed.

How can I track changes in compliance of my stocks?

Islamicly provides you an option to create portfolios of the stocks you want to track. If any change in compliance occurs amongst the stocks in your portfolio, you are notified through a notification on the app on a daily basis.
Additionally, you are notified of any changes in compliance of stocks in your entire access market.
Through portfolios, you can even add your actual holdings and see how your Shariah compliant stocks are performing!

How to Create a Portfolio on Islamicly?
- Portfolio tab is available in the bottom bar
-Instantly view list of all your portfolios
- Each portfolio bar indicates: Number of stocks held, % compliance, Holding value, performance, indicator for change in compliance
- View currency selection available.

Manual upload:
- Click on the “+” button to create a portfolio
- Assign a name for your portfolio
- Select your access market
- Tap on the stock tile to add (you can choose multiple stocks in one go)
- Click on “Add stocks in portfolio name” (bottom blue bar)
- Your portfolio is created.

Through a file upload:
Directly upload your portfolio from your brokerage account Instantly screen your existing portfolio for Shariah compliance. Islamicly now allows you to upload your existing portfolio from your brokerage account to instantly create a portfolio on Islamicly and keep it in sync with your brokerage (trading) account.
This way you do not have to manually add the stocks to your portfolio. You need not make manual changes to the portfolio on Islamicly to reflect the changes you made to your portfolio in your actual brokerage (trading) account.

- 1. Click on the “Create new Portfolio” option on your app home page (at the top)
- 2. Input a name for the portfolio (in the dialogue box opened at the bottom) and then click “Submit”
- 3. You will be given two options. Click on the option “Upload file (.csv and .xlsx)
- 4. It will open you files section on your phone. Search the file which you downloaded from your brokerage (trading) account and select it.
- 5. For the first time, it will ask you to identify and match the headers. Click submit once you do it.
- 6. It will instantly create your portfolio and give Shariah compliance. Islamicly makes tracking Shariah compliance of stocks that easy!

Keep investing ISLAMICLY!!

Do watch what one of the pioneering scholar of Islamic finance says about Islamicly here:

Few Words About Us!!

"I want to thank everyone who has worked and is working on it. I found such an app. Once I wrote something like "Halal stock app" on Google and downloaded Islamicly. Now it is easy for me to determine which stock is Sharia compliant or not with this app! Green is permitted, Red is haram, Purify dividends, Changes in compliance, and all other features what exactly I was looking for.
This is a great investment in the financial knowledge of the Ummah. Assalamualaikum and thank you for this App"

Mr. Abdul Rashid

lsamicly is a very good app and it helps me lot in my trading business and it is very helpful in finding or winning shariah compliant stocks which I am managing in quite, few numbers of stocks. It is very transparent and it provides us many information on the app and Inshallah and as I understood that you will offer us the web portal as well and I am pretty looking for it to wait so that I can have many things to be screened on the portal Inshallah. Thank you very much, Thank you for making the app for inshallah, Allah Subhanahu wa Talala bless you all Inshallah​

Mr. Ahmad Sufi Hassan

"I am currently Active Trader for mainly US Stocks Market, so I like Islamicly because its features How they update App daily so easy for me to find stocks for Shariah Screening and they provide me clear information about How for me As not understanding about Shariah but I can understand How they screen the Shariah information in this App so I clearly know How about 5% purification and how to set the portfolio for me and this is helpful for me to find shariah stocks.
That`s All. I love Islamicly"

Mr. Hairul Azizi

Share via
Copy link
Powered by Social Snap