The Nigerian Stock Exchange (NSE) has conducted an Islamic screening exercise on the 15 companies in the NSE Lotus Islamic Index (NSE LII) and other Shari’ah-compliant companies using their 2012 year-end financial statements.
Companies like Japaul Oil & Maritime Service Plc, Honeywell Flourmills plc, and Dangote Flour plc, may likely fail the screening exercise and may be replaced, according to the NSE. The Exchange notes that possible replacements will be made to the stocks that are due to exit the index.
According to the NSE, “the five possible replacements that have passed all Islamic screening, as well as liquidity and market capitalisation criteria, are CAP plc, Julius Berger Nigeria plc, Presco plc, Dangote Sugar Refinery plc, and Redstar Express plc.”
In July 2012, the NSE and Lotus Capital Limited launched the certified Shari’ah-compliant index to cater for investors with a preference for ethical/Shari’ah compliant investments. The NSE LII tracks the performance of 15 Shari’ah compliant equities, which have met the eligibility requirements of a renowned Shari’ah Advisory Board.
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The NSE has also confirmed in a statement that the 15 companies that will make the NSE LII list and Market Capitalisation will be made public before the end of the month, and before the index re-basing date of July 1, 2013.
All the companies that will appear in the Index have been thoroughly screened by Lotus Capital Halal Investment, in accordance with a methodology approved by an internationally-recognised Shari’ah Advisory Board comprising of renowned Islamic scholars.
“The component stocks are rigorously screened and reviewed bi-annually to ensure their continuous compliance for inclusion in the index. The NSE LII was the first index created to track the performance of Shari’ah-compliant equities on the floor of the bourse, with the objective of increasing the breadth of the market and creating an important benchmark for investments as the alternative non-interest investment space widens,” the NSE noted.
