How Shariah screening works on PSX

“Shariah-compliant” on the Pakistan Stock Exchange is not a vibe — it is a published methodology. PSX and Al Meezan Investment Management maintain two indices of screened companies, and SuperX’s Halal-only filter follows the same list.

The two indices

• KMI-30 (KSE-Meezan Index) — the 30 largest Shariah-compliant companies by free-float market capitalisation, launched in 2008. Think of it as the Halal investor’s KSE-30.
• KMI All-Share (KMIALLSHR) — every listed company that passes the screens, added later to cover the whole compliant universe rather than just the top 30.

Both are reviewed twice a year, so a company can enter or leave the compliant list at each recomposition when its latest financials are re-screened.

The six screens

A company must pass all of the following, screened on its latest available annual or half-yearly accounts — quarterly accounts are substituted when the period’s are not out yet, and they are not always audited:

1. Core business must be permissible. Conventional banking, conventional insurance, interest-based leasing, alcohol, tobacco, pork, gambling, arms manufacturing and adult entertainment are excluded outright. Islamic banks and modarabas are not excluded — Meezan Bank itself screens as compliant.
2. Interest-bearing debt below 33 % of total assets. Some conventional borrowing is tolerated; a debt-heavy balance sheet is not. This limit was cut from 37 % to 33 % by the SECP on 26 February 2026, so older guides — and some pages that have not been updated since — still quote 37 %. Note the denominator: total assets from the accounts, not market capitalisation, which is what the global Dow Jones and S&P Islamic screens use.
3. Non-compliant investments below 33 % of total assets. Money parked in interest-bearing instruments or non-compliant securities counts here. The SECP has advised PSX to consider cutting this to 30 %; that has not been approved, so 33 % is the number in force.
4. Non-compliant income below 5 % of total revenue. Interest income and income from non-permissible activities combined.
5. Illiquid assets at least 25 % of total assets. The company must own real productive assets, not just cash and receivables — otherwise trading its shares is effectively trading money for money.
6. Market price per share above net liquid assets per share. Net liquid assets per share is (total assets − illiquid assets − total liabilities) ÷ number of shares. The market price must be strictly greater — the share must be worth more than the cash behind it, for the same reason as screen 5.

Each screen is a ratio from the accounts, which is why the list only changes at recomposition rather than day to day.

Purification

Even a compliant company can have a small amount of non-permissible income (screen 4 allows up to 5 %). The standard practice is purification: give away the share of dividends that corresponds to that income. Companies in the index publish the proportion; brokers and fund managers typically pass it on. SuperX shows the compliance status but does not calculate purification for you — ask your scholar or fund for the current ratio.

What does the Shariah badge on a stock page mean?

On a SuperX stock page, the SHARIAH COMPLIANT badge and the answer to “Is this company Shariah compliant?” come from one test: the company is a member of the KMI-30 or the KMI All-Share index, going by SuperX’s index membership records for the last seven days. The page words the three possible results like this:

• Yes: the company “is flagged Shariah-compliant in PSX data as of” the page’s date, and the page names the KMI index it belongs to.
• No: SuperX holds index membership records for the company in the last seven days and none of them is a KMI index. The page says the company “is not flagged Shariah-compliant in PSX data” and is not part of the KMI-30 or KMI All-Share.
• No status: SuperX holds no index membership record for the company in those seven days, so the page says it has no Shariah screening status for the symbol.

On the committed snapshot of 19 October 2026, 305 of 721 stock pages carried the flag, 189 were not flagged and 227 had no status. The flag is PSX’s index membership passed on. SuperX does not run the six screens itself, and the flag is not a ruling. The list can change at each review, so confirm with your Shariah advisor before you rely on it.

How SuperX uses this

• Halal-only filter — in search, the watchlist and the pie builder, toggle it on and non-compliant symbols disappear from results.
• 🌙 badge — compliant symbols carry a crescent marker wherever they appear.
• Shariah-Compliant PSX pie — a curated basket built only from KMI-screened names, on the Baskets page.
• Index family — KMI-30 and KMI All-Share sit in the Shariah group of the index family so you can compare them with KSE-100 on the same screen.

The filter follows the published KMI list. It does not re-run the screens on the fly, and it does not cover instruments the index does not (sukuk, funds, unlisted companies).

What SuperX does not do

• We do not issue rulings. Whether the KMI methodology matches your school of thought is a question for a qualified scholar.
• We do not track purification ratios or pay anything on your behalf.
• We do not treat “compliant” as “recommended”. A stock can pass every screen and still be a poor investment.

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Compliance disclaimer: SuperX’s Shariah screening reflects the published KMI index constituents. It is a convenience filter, not religious or investment advice. For Zakat on the same holdings, see Zakat explained.