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Shariah-Compliant Screening Practices in Malaysia

Authors: Mohamed Azam Mohamed Adil; Catherine S. F. Ho; Mansor Md. Isa; Ezani Yaakub; Mohammad Mahyuddin Khalid;

Shariah-Compliant Screening Practices in Malaysia

Abstract

This study reviews twenty-eight users of Islamic equity screening in Malaysia based on the most recent information collected in 2012. Except for the Securities Commission and two index providers, the rest of the users are mutual fund companies. Our review indicates that, with few exceptions, the majority of the local screening users are following the benchmarks set by the Securities Commission of Malaysia, in which only industry screening is applied to separate Shariah compliant from non-compliant companies. A few users, however, employ a two-tier quantitative approach in addition to the qualitative screening. The qualitative screening removes companies whose main businesses are Shariah non-compliant. Companies with mixed activities are then subject to quantitative screenings in which non-compliant contributions are measured against applicable benchmarks. The Securities Commission is scheduled to have in place a two-tier quantitative screening method which is more in line with international practices by the end of 2013.

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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