Syariah-approved securities1 are traded daily on the Malaysian stock market. Perhaps investors may have already been investing in them without realising it. Essentially, Syariah-approved securities are the same securities traded on the Malaysia Securities Exchange Bhd (MSEB) but they have to comply with a set of criteria before they can be deemed as such.
Permissible vs non-permissible activities
Under Syariah principles, one of the most crucial aspects before an investment decision is made is the need to evaluate the business activities of a company to ascertain whether its activities are permissible (halal) or non-permissible (non-halal). So how do investors determine this?
Fortunately for the Malaysian investors, the Syariah Advisory Council (SAC) of the Securities Commission (SC) has taken steps to evaluate the business activities of public-listed companies. Companies that fulfilled the criteria set by the SAC will have their securities classified as Syariah approved.
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