chapter  1
25 Pages

Screening and performance of shariah-compliant companies

WithMamunur Rashid, Andrew Saw Tek Wei

This chapter has two sections. The first section discusses the processes of shariah screening for Islamic firms, which seeks to help investors and stakeholders alike to make informed decisions on their Islamic investment and financing options. The second section centres on common performance indicators for selected firms, both shariah-compliant and conventional. Our performance analysis is intended to expand upon our pre-existing concepts on the nature of financial engagements and the value added by shariah-compliant firms with respect to the outputs of their conventional peers. Our results seemed to indicate that Islamic firms performed better in terms of asset management, debt management and market value ratio, while results from their conventional counterparts seem to demonstrate better liquidity ratios and profitability ratios.