Shariah-compliant revision by SC to offer buying opportunities for long-term investors

by **Cals** Fri 29 Nov 2013, 18:34

Business & Markets 2013

Written by Bernama

Friday, 29 November 2013 18:20

KUALA LUMPUR (Nov 29): Alliance Research is optimistic buying opportunities will emerge for long-term investors following the revision of Shariah-compliant securities by the Securities Commission (SC).
The SC today released the updated the list of Shariah-compliant securities which has now been reduced to 653 securities while 158 others were removed from the list.
"While selling pressure may kick-in as investors with Shariah mandates rebalance their portfolio, long-term investors should take such an opportunity to accumulate on weakness," it said in a research note today.
It said with the application of the revised screening methodology, investors with Shariah mandate would be given six months from today to dispose off Shariah non-compliant securities, provided the market price of such securities exceeds or is equal to the investment cost.
However, investors would be allowed to hold their investment in such newly reclassified Shariah non-compliant securities if the market price was below investment cost, the research house added.
"Given a smaller investible universe, investors with Shariah mandates are likely to "chase up" good Shariah-compliant stocks.
"We recommend investors accumulate under-invested Shariah-compliant stocks such as Brahim's, Oldtown, Suria Capital and Cahya Mata Sarawak," it said, adding that interest in large capitalised and liquid Shariah compliant stocks would also be firm favourites among investors.
"For this reason, we also recommend Sapurakencana Petroleum Bhd, Telekom Malaysia Bhd, Tenaga Nasional Bhd and DiGi Bhd," it added.