Many people are interested in investing in shares, but are still confused about the difference between Shariah-compliant shares and non-Shariah-compliant shares.
Although both are traded on Bursa Malaysia, not all shares meet the criteria set according to Shariah principles.
Therefore, it is important to understand the difference before making an investment decision.
Shariah-compliant shares are shares of companies that have been certified by the Shariah Advisory Council of the Securities Commission Malaysia.
The assessment is made based on business activities and certain financial criteria. The company must conduct business that complies with Islamic principles, be free from usury, gambling and prohibited activities.
In addition, the level of debt and income from non-Shariah-compliant sources must also be within the permitted limits.
On the other hand, non-Shariah-compliant shares are shares of companies that do not meet these conditions.
Examples include conventional banks, gambling companies, liquor manufacturers and businesses that rely heavily on interest or riba.
Such shares are not listed as Shariah-compliant shares by the Securities Commission Malaysia.
Some believe that Shariah-compliant shares provide lower returns. In fact, this perception is not accurate.
The profitability of a stock depends on the company's performance, economic conditions, market demand and the efficiency of the company's management.
Shariah status is not a factor that determines whether a stock will make a profit or a loss.
Before investing, take the time to check the Shariah status of a stock. This information can be obtained through the list of Shariah-compliant stocks issued by the Securities Commission Malaysia, the Bursa Malaysia website or trading applications that display the Shariah logo and markers.
Good investment is not just about chasing profits, but also understanding what you are buying and assessing the risks. With sufficient knowledge, investors can build a stronger portfolio that suits their respective investment goals.
