Bank Islam stands alone as finance sector lags in Syariah compliance
KUALA LUMPUR: Banking and finance remain the least syariah-compliant sector on Bursa Malaysia, with only five counters meeting the criteria set by the syariah Advisory Council (SAC) of the Securities Commission (SC).
In its latest biannual review, the SC said just five out of 38 financial services firms, or 13 per cent, are classified as syariah-compliant, with Bank Islam Malaysia Bhd being the only bank among them.
The other four are Bursa Malaysia Bhd, MBSB Bhd, RCE Capital Bhd and Syarikat Takaful Malaysia Keluarga Bhd, a reminder that Islamic-compliant players in the finance space remain few and far between.
It is worth noting that MBSB, formerly Malaysia Building Society Bhd, is the parent company of the non-listed MBSB Bank Bhd.
The May 2025 update, which takes effect today, also saw nine companies dropped from the syariah-compliant list, including Sarawak Cable Bhd, MAG Holdings Bhd and GuocoLand (Malaysia) Bhd.
Others removed are Carzo Holdings Bhd, Rhong Khen International Bhd, TP Tec Holding Bhd, VETECE Holdings Bhd, Vsolar Group Bhd and newly listed Saliran Group Bhd, which made its debut on March 13.
"These refer to securities which were earlier classified as syariah-compliant but due to certain factors such as changes in the companies' business operations and financial positions, are subsequently reclassified as syariah non-compliant," the SC said.
In light of this, investors holding such securities have been advised to dispose of them if the market price on the effective date is equal to or higher than the original investment cost.
"Any dividends received up to the effective date and capital gains arising from the disposal of syariah non-compliant securities on the effective date can be kept by the investors," it added.
However, the SC noted that any dividends or gains received after that must be channelled to baitulmal or charitable bodies.
Meanwhile, 41 new companies have been added to the syariah-compliant list, spanning sectors such as healthcare, property, plantations and logistics.
Among the newly classified stocks are Apex Healthcare Bhd, IOI Properties Group Bhd, PLS Plantations Bhd, CJ Century Logistics Holdings Bhd, RichTech Digital Bhd, Oriental Kopi Holdings Bhd and Eco-Shop Marketing Bhd.
The SAC said the list is based on audited financial statements issued between Oct 1, 2024, and March 31, 2025.
Companies are assessed using a two-tier quantitative screening approach that involves business activity benchmarks and financial ratios, alongside qualitative evaluations of public perception from an Islamic perspective.
With the latest changes, 850 out of 1,056 listed companies are now deemed syariah-compliant, maintaining a compliance rate of 80 per cent.
Construction and energy remain the most syariah-compliant sectors, with compliance rates of 96 per cent and 93 per cent respectively. Transportation and logistics follow at 91 per cent.
The SC updates the list twice a year, in May and November.
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