KMI 30 Index

By
Muhammad Asad Zahid
KSE and Al-Meezan Investment Management

launched its first co-branded Islamic Index (KMI30) on 1st of Ramadan 1429 HIJRA which tracks
30 most liquid SHARIAH compliant stocks.
Al-Meezan Investments and Meezan bank
provides its SHARIAH expertise, guidelines, skills
and stocks activities with regard to launching
and continuation of process of the Index.
On the contrary KSE provides maintenance and
dissemination support for the Index.
To provide investors suitable benchmark for

returns on SHARIAH compliant equity
investments.
To help SHARIAH conscious people choose
the profitable stocks which are SHARIAH
compliant
To provide a relevant benchmark to Islamic
equity funds for comparing their
performance.
KSE-Meezan Index is calculated using the Free-Float

Market Capitalization, wherein, the level of index at
any point in time reflects the free-float market value
of the selected Shariah compliant shares in relation to
the base period.
Free-Float of a security is defined as the proportion of
total shares outstanding that are deemed available for
purchase in the Stock Exchange.
Therefore, it generally excludes the shares held by
controlling directors / sponsors / promoters,
government and other locked-in shares not available
for trading in the normal course.
Listed companies shall submit their pattern

of shareholding in the prescribed manner to
help the Exchange determine a Free-Float
Factor.
Free float factor is a multiple with which
total market capitalization of a company is
adjusted to arrive at its Free float market
capitalization.
KMI 30 index consist of 30 SHARIAH

compliant companies.
SHARIAH compliance is ensured through
Stock screening process conducted by Al
Meezan Investment Management Limited
and counter checked by Islamic Financial
Advisory division of Meezan Bank limited.
Oil & Gas Development Co.
OGDC
Pakistan Petroleum
PPL
Fauji Fertilizer Co. Ltd.
FFC
Pakistan Oilfields Ltd.
POL
Pakistan State Oil
PSO
Hub Power Co.
HUBC
Lucky Cement
LUCK
Kot Addu Power Co. Ltd.
KAPCO
D.G. Khan Cement
DGKC
10
Nishat Mills Ltd.
NML
11
Pakistan Telecommunication Co. Ltd.
PTC
12
K-Electric Limited
KEL
13
Fauji Fertilizer Bin Qasim Ltd.
FFBL
14
Engro Foods Ltd.
EFOODS
15
Fauji Cement Ltd.
FCCL
16
Packages Ltd.
PKGS
17
Attock Petroleum Ltd.
APL
18
Millat Tractors
MTL
19
Glaxo Smith Kline
GLAXO
20
Attock Refinery
ATRL
21
National Refinery Ltd.
NRL
22
Maple Leaf Cement
MLCF
23
Kohat Cement
KOHC
24
Cherat Cement
CHCC
25
I.C.I. Pakistan
ICI
26
Shell Pakistan
SHEL
27
Mari Gas
MARI
28
Sui Northern Gas
SNGP
29
Pioneer Cement
PIOC
30
Netsol Technologies
NETSOL
Criteria 1: Business of the Investee company

The business of the Investee company should be
Halal. Accordingly investment in shares of capital

banks, insurance companies, leasing companies,
companies dealing in alcohol etc. are not
permissible.
Criteria 2: Interest bearing debt should be less

than 37% of total assets.
Interest bearing debt includes Bonds, TFCs,
conventional bank loans, finance lease, preference

shares etc.
Criteria 3: Non shariah compliant investments

should be less than 33% of total assets.
Non shariah compliant investments include
investments in conventional mutual funds,

conventional money market instruments, Bonds,
PIBs, FIB, CoIs, CoDs, TFCs, DSCs, T-bills, all
interest based placements and interest based loans
and advances etc.
Criteria 4: Non compliant Income should be less

than 5% of total revenue.
Non compliant income includes bank interest, income
from gambling, nightclubs, prostitutions, casino,

tobacco, alcohol, dividend income from above
mentioned businesses, dividend income from Shariah
non compliant companies etc.
Capital gain need not be purified.
Total revenue includes gross sales + other operating
income.
Dividend purification is done by disbursing amount in
charity calculated as per the charity rate determined.
Criteria 5: Illiquid assets/Total assets > 0.25 or

25%
Illiquid assets include property, plant and
equipment, building, furniture and fixture,

intangible assets, stock in trade, stores and spares
and all similar assets.
Criteria 6: Market price per share > Net liquid

assets / share
Net liquid assets/share = Total assets illiquid
assets Total liabilities divided by number of

shares outstanding of the Investee company.
Criteria 1:
The Company which is on the Defaulters Counter
and/or its trading is suspended, declared NonTradable (i.e. NT) in preceding 6 months from the
date of re-composition shall NOT be considered
for inclusion in KMI-30 Index
Criteria 2:
The Company will be eligible for KMI-30 Index if
its securities are available in the Central

Depository System
Criteria 3:
The Company should have a formal listing history
of at least two months on KSE
Criteria 4:
The company must have an operational track
record of at least one financial year
Criteria 5:
The Company should have minimum free-float
shares of 5% of total outstanding shares
Criteria 6:
The Company will be eligible for KMI-30 Index if
its securities are traded for 75% of the total

trading days
Criteria 6:
Mutual Funds (both Open-Ended and Closed-
Ended) are ineligible for inclusion in the KMI-30

Index.
From the list of Shariah compliant companies,

securities are selected on the basis of Free Float
and Impact Cost.
While ranking the companies 50% weight is
assigned to Free Float capitalization and the
remaining 50% is allocated to Impact Cost, such
that the companies with the highest Free Float
and the lowest Impact Cost get the highest rank
in the selection process.
Top 30 ranked companies as per above criteria
are included in Islamic Index.
The Index Technical Committee has used

15,000 as the base value, whereas June 30, 08
serve as the base period for the index.
The value of Islamic Index shall be arrived at
by dividing the free-float market
capitalization of all eligible Islamic Securities
in the Index by a number called the Index
Divisor.
The index will be re-composed on semiannual basis as follows:

Basis: December 31 and June 30
Revision: May 15 and November 15
Islamic Index shall be calculated and

disseminated to market participants,
regulators and trading screens on real-time
basis.

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By

Muhammad Asad Zahid

KSE and Al-Meezan Investment Management

To provide investors suitable benchmark for

KSE-Meezan Index is calculated using the Free-Float

Listed companies shall submit their pattern

KMI 30 index consist of 30 SHARIAH

Oil & Gas Development Co.

Fauji Fertilizer Co. Ltd.

Pakistan Oilfields Ltd.

Pakistan State Oil

Hub Power Co.

Kot Addu Power Co. Ltd.

D.G. Khan Cement

Nishat Mills Ltd.

Pakistan Telecommunication Co. Ltd.

Fauji Fertilizer Bin Qasim Ltd.

Engro Foods Ltd.

Fauji Cement Ltd.

Attock Petroleum Ltd.

Glaxo Smith Kline

National Refinery Ltd.

Maple Leaf Cement

Sui Northern Gas

Criteria 1: Business of the Investee company

Halal. Accordingly investment in shares of capital

Criteria 2: Interest bearing debt should be less

conventional bank loans, finance lease, preference

Criteria 3: Non shariah compliant investments

investments in conventional mutual funds,

Criteria 4: Non compliant Income should be less

from gambling, nightclubs, prostitutions, casino,

Criteria 5: Illiquid assets/Total assets > 0.25 or

equipment, building, furniture and fixture,

Criteria 6: Market price per share > Net liquid

assets Total liabilities divided by number of

its securities are available in the Central

of at least two months on KSE

record of at least one financial year

shares of 5% of total outstanding shares

its securities are traded for 75% of the total

Ended) are ineligible for inclusion in the KMI-30

From the list of Shariah compliant companies,

The Index Technical Committee has used

The index will be re-composed on semiannual basis as follows:

Islamic Index shall be calculated and

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