Fatawah & Shariah screening resources
The exact methodology PSX and Al Meezan use to screen every stock in KMI-30, the All Shares Islamic Index, and MZNPI — sourced directly from official PSX brochures and notices, so you can see the reasoning for yourself, not just take our word for it.
The six Shariah screening ratios
A stock must pass ALL six criteria to be included in KMI-30, the All Shares Islamic Index, or MZNPI. Fail even one, and it's out — no exceptions.
1. Core business
Must be Shariah-permissible
The company's core business must not violate Shariah principles. Conventional banks, insurance companies, leasing companies on interest, and businesses in liquor, pork, gambling, or other impermissible activities are excluded. Tobacco and explosives are excluded on ethical grounds.
2. Interest-bearing debt to total assets
Must be less than 37%
Debt includes bonds, TFCs, commercial paper, conventional bank loans, finance leases, hire purchase, and preference shares — any interest-bearing obligation.
3. Non-compliant investments to total assets
Must be less than 33%
Covers investments in conventional mutual funds, money market instruments, interest-bearing deposits, bonds, PIBs, T-Bills, derivatives, and holdings in companies already declared non-compliant.
4. Non-compliant income to total revenue
Must be less than 5%
Includes income from gambling, interest-based transactions, derivatives (Gharar), conventional insurance claims, late-payment penalties, casinos, and alcohol.
5. Illiquid assets to total assets
Must be at least 25%
Illiquid assets are those whose trade price can deviate from par value under Shariah rules — inventory, work-in-process, property, plant & equipment, and stores/spares.
6. Market price vs. net liquid assets per share
Market price must be ≥ net liquid assets per share
Net liquid assets per share = (Total Assets − Illiquid Assets − Long Term Liabilities − Current Liabilities) ÷ Shares Outstanding.
Source: KMI-30 Index Methodology and All Shares Islamic Index of Pakistan brochures, published by PSX and Al Meezan Investment Management. Thresholds are set by the index's Governing Policy Committee and may be revised — always confirm current thresholds with your own Shariah advisor.
The three Shariah-compliant indices
Each index serves a different purpose — broad coverage, the flagship benchmark, or a concentrated top-12 basket.
KSE-Meezan Index
Pakistan Stock Exchange & Al Meezan Investment Management
- Base period
- June 30, 2008
- Base value
- 15,000 points
- Recomposition
- Semi-annual — June 30 (implemented Nov 15) and Dec 31 (implemented May 15)
Top 30 Shariah-compliant companies by free-float market capitalization and impact cost (50% weight each). Free-float capitalization per constituent capped at 12% of overall index capitalization.
KMI-30 Index Methodology (PSX)All Shares Islamic Index of Pakistan
Karachi Stock Exchange & Meezan Bank Limited
- Base period
- December 31, 2014
- Base value
- 15,000 points
- Recomposition
- Semi-annual — December 31 (implemented May 15) and June 30 (implemented Nov 15)
Comprises every Shariah-compliant company listed on PSX that passes both the six Shariah screens and technical eligibility filters (no minimum count cap, unlike KMI-30's fixed 30).
All Shares Islamic Index Brochure (PSX)Meezan Pakistan Index
Pakistan Stock Exchange & Al Meezan Investment Management
- Base period
- September 1, 2020
- Base value
- 10,000 points
- Recomposition
- Semi-annual, implemented 10 working days after each KMI-30 recomposition
Tracks the top 12 KMI-30 constituents ranked by average traded value (60% weight) and free-float market capitalization (40%). Per-stock weight capped 3.5%–15%; per-sector weight capped at 25%.
MZNPI Brochure (PSX)Original source documents
Every claim on this page is drawn from these official PSX and Al Meezan publications. Download and read them directly — we'd rather you verify than just trust us.
KMI-30 Index Methodology
Official free-float methodology, eligibility criteria, and corporate action adjustments.
All Shares Islamic Index of Pakistan
Full screening methodology for PSX's broadest Shariah-compliant index.
Meezan Pakistan Index (MZNPI) Brochure
Methodology for the 12-stock Shariah-compliant benchmark derived from KMI-30.
PSX Notice N-065 — MZNPI Recomposition
A real recomposition notice showing incoming/outgoing constituents and updated weights.
Shariah Disclosures by Listed Companies
PSX notice N-1419 listing company-level Shariah compliance disclosures.
PSX Investors Zone does not issue fatawah or Shariah rulings. These documents are published by Pakistan Stock Exchange and Al Meezan Investment Management Limited. For a personal ruling on your own investments, consult a qualified Shariah advisor.