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To tap into the trillion-dollar investments of Muslims around the world, the Philippine Stock Exchange (PSE) is tagging Sharia-compliant companies in the bourse to attract more funds.
PSE president Hans Sicat noted they are making a list because investors from Mindanao prefer to invest in Indonesia and Malaysia. “(This is) because of their Sharia-compliant companies,” he said.
“From an institutional point of view, over a trillion dollars' worth of investors’ money could be going into Sharia-compliant companies. That will be a large pool of investments,” he added.
The list is expected to be completed next year.
Under Sharia or Islamic Law, companies are not allowed to derive the bulk of revenues from gambling and alcoholic beverages, according to the PSE official.
A team is now studying the Malaysia, Indonesia and the Middle East experience and see how this can be applied to the Philippine equities market.
The Sharia Council will determine which companies Sharia-compliant in terms of business exposure and rules of investments.
A theologically-respected and financially-adept individual will head the council, Sicat noted.
“We hope that the markets will take it upon themselves to create the actual products,” he said.
The plan was in place before the Aquino administration the Moro Islamic Liberation Front signed the framework agreement last month creating an autonomous Bangsamoro, Sicat added. — VS, GMA News