According to the Ahmedabad-based Parsoli Investments, in Gujarat only, Rs 1,600 crore were invested in the Shariah compliant share market, also known as the Halaal Share Market, last year. Now while Parsoli Investments tries to generate awareness on the topic, more and more Muslims are dabbling in the Shariah compliant share market. According to experts, the trend picked up after a lot of families, who lost their property in the riots, took to the Shariah complaint trading. It suited them religiously and also acted as a safeguard to investments and returns. As Zafar Sareshwala, CEO of Parsoli Investments, said, the Islamic Equity Index was more stable than the BSE-Sensex when the South Asian market witnessed a slump at the end of 2007.
He said Muslims from the state have started investing in the shares of heavy engineering, oil, infrastructure, clothing and textile companies. There are 1,078 companies listed under the Shariah-complaint trading list from the BSE Sensex. Capital goods and I-T companies top the list. There are about 150 companies in this category and only 9 belonging to the media sector. Sareshwala further said that most companies, which do not comply with Shariah norms, are the ones that have more than 33 per cent debt ratio in the total market cap.
“By maintaining a debt of less than 33 per cent of the total market cap, the Shariah-based companies get a big boost. Their business expands and the market wants to trade with them,” said Sareshwala.
He said he lost his brokerage business, Parsoli Investments, in the riots and revived it after listing out Sharia't based companies. Now his firm is the leading player in the Sharia't complaint Islamic investment model, he said. The Shariah forbids Muslims from investing in companies that charge interest, including banks and insurance firms and companies dealing in alcohol, entertainment and pork, which are deemed as haraam.
Pervez Patel, who now wants to set up a franchise for a Halaal share firm, said a large number of non-Muslims are also investing in the Halaal share market. "It is comparatively a safer and better option to invest. However, there are a lot of misconceptions about investing in stocks among the Muslims the world over. As Halaal shares go up in Gujarat, awareness among the Muslims will increase," he said. Sareshwala said Parsoli investments will organise seminars and conferences all over Gujarat, including Vadodara and ask Muslims to invest in the Halaal share market. He said this will demystify the share market for a good number of Muslims who have traditionally invested only in real estate.
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