Our Shariah Screening Methodology
HalalSignalz follows internationally accepted guidelines (AAOIFI Standards, Dow Jones Islamic Index criteria, MSCI Islamic Index) to identify equities and crypto assets suitable for Shariah‑compliant portfolios.
1. Sector (Business Activity) Screening
Companies deriving any material revenue from the following sectors are excluded:
- Conventional banking & insurance
- Alcohol, pork, tobacco, gambling, adult entertainment
- Weapons, defense, and interest‑based financial services
2. Financial Ratio Screening
A company passes if it meets all three thresholds:
| Ratio | Formula | Max |
|---|---|---|
| Total Debt | Total Interest‑Bearing Debt ÷ Market Cap | < 33 % |
| Cash & Interest Securities | (Cash + Interest Securities) ÷ Market Cap | < 33 % |
| Accounts Receivable | Accounts Receivable ÷ Total Assets | < 49 % |
3. Purification Threshold
Companies with non‑permissible income > 5 % of total revenue are excluded. For minor impure income, we calculate the per‑share purification amount and report it in the signal details.
4. Crypto Assets Screening
We apply the Crypto Shariah Screening Framework(Mufti Faraz Adam, 2021): technology layer permissibility, use‑of‑proceeds, speculative leverage, and governance review.
5. Review Frequency
- Equities — Quarterly: ratios refreshed after earnings releases.
- Crypto — Monthly: project documentation re‑check.
Disclaimer
HalalSignalz provides educational information only and does not constitute individualized financial advice. Always consult your own scholar or adviser before investing.
Last updated: 16 April 2025