+ 40 – 30 = 673

News

SC has published the latest list of Shariah compli ant securities under the new screening methodology for the Nov review, which will take effect from 28 Nov 2014.

In short, 40 stocks were added to the list but 30 stocks were excluded from the previous list , lengthening the list to 673 stocks.

Overall, the SC has maintained its guidance on timing for the disposal of securities which have been reclassified as Shariah non-compliant.

OUT

Among notable stocks under HLIB universe that were reclassified as Shariah non-compliant are Perdana (BUY; TP: RM1.68) and SKPetro (BUY; TP: RM4.26). The exclusions were well within expectations as companies have already forewarned earlier. Please refer to Figure 1 for the full list.

Another notable name is Puncak (Not Rated).

IN

However, contrary to earlier expectations, IOI Corp (HOLD; TP RM4.23) retained its status as Shariah compliant.

As for those who were newly classified as Shariah compliant, two are under HLIB universe. They are MCIL (HOLD; TP RM0.88) and Sasbadi (BUY; TP: RM2.15). Again, the inclusions were also within expectations as guided. See Figure 2 for the full list.

Other notable names and/or newly listed companies that were classified as compliant are Amway, Boustead Plant, Econpile, Hup Seng Consolidated, Icon Offshore, Padini, Pantech, Reach Energy and SKP Resources.

Comment

For stocks that are excluded and on our Buy list (Perdana and SKPetro) could have potential weaknesses.

We also reiterate our BUY ratings on Sasbadi as its new status as Shariah compliant could attract a wider spectrum of investors to its unique business proposition in the education space

Source: Hong Leong Investment Bank Research - 28 Nov 2014