In the latest list of Shariah compliant stocks which will take effect today, 17 were added and 7 were removed. The list of Shariah compliant stocks now stands at 693 (Nov 2017: 686). Within our coverage, Digi was re-included while Rohas and Sime Plant were new additions. There were no dropouts from the Shariah list within our coverage universe.

NEWSBREAK

Yesterday, the Securities Commission (SC) published the latest list (May review) of Shariah compliant stocks which will take effect from today (25 May). In summary, 17 stocks were added to the Shariah compliant list while 7 stocks dropped out from the previous list (Nov 2017 review). In addition, 3 stocks that were previously Shariah compliant during the Nov 2017 review have since been delisted. Overall, the list of Shariah compliant stocks now stands at 693 (Nov 2017: 686), comprising 77% of the total stocks listed on Bursa.

HLIB’s VIEW

Of the 17 stocks that were included in the list, Digi, Rohas and Sime Plant are within our coverage universe. The return of Digi (BUY, TP: RM5.10) into the list was not surprising as its debt position was already Shariah compliant with the RM5bn Sukuk that was raised in 2Q17 (reflected in FY17 audited accounts which was released in 1Q18). For Rohas (BUY, TP: RM1.74), it managed to get into the list following the publication of its first audited accounts (for FY17) in April this year. This is Rohas’ first audited account release post RTO which took place in Mar 2017. The inclusion of Sime Plant (HOLD, TP: RM5.52) is also within expectations as its financial ratios have been Shariah compliant since its listing last year. However it did not manage to make it into the previous list (effective 24 Nov) as it was only listed on 30 Nov. Other notable names that made it into the list include GDex (not-rated) and Sime Property (not rated). There were no dropouts from the Shariah list within our coverage universe.

Source: Hong Leong Investment Bank Research - 25 May 2018