Bursa Malaysia, Pribumi Launch World's First Zakat Index

KUALA LUMPUR, July 15 (Bernama) -- Bursa Malaysia Bhd and Persatuan Remisier Bumiputera Malaysia (PRIBUMI) have launched the PRIBUMI Bursa Malaysia Zakat Index (PBMZI), a new customised index designed to promote greater recognition of public listed companies (PLCs) that choose to adopt corporate zakat practice.

The exchange’s chairman Tan Sri Abdul Wahid Omar said the launch of the Zakat Index -- the world’s first -- seeks to recognise zakat-paying listed issuers and encourage greater zakat contributions from more PLCs. 

“Currently, the Zakat Index has 27 constituents across various sectors, including financial services, utilities telecommunications, property, plantation, technology,  healthcare, transportation, consumer products, and energy,” he told a press conference after the Zakat Index launch ceremony here today.

He said the PBMZI tracks the performance of the top 200 companies listed on the Main Market of Bursa Malaysia that meet specific eligibility criteria, namely profitable companies that make corporate zakat contributions. 

“Then, the shortlisted companies undergo rigorous screening to ensure they have no known significant controversies before being deemed eligible for inclusion in the index,” he explained, adding that eligible PLCs are weighted within the index based on market capitalisation.

Abdul Wahid expressed confidence that the number of constituents will increase in the future.

“We will have a semi-annual review of the PBMZI constituents in June and December. Hopefully, we will have more companies that will be part of the universe and that when they pay zakat, they will be included in the index,” he said.

He added the idea of PRIBUMI and Bursa Malaysia collaborating on the Zakat Index arose from both parties' recognition of the potential impact that it could have on increasing contributions of zakat-paying companies in the economy.

“Leveraging our in-house capabilities to analyse and calculate indices, the Zakat Index is our first foray into customised indices, expanding our ability to provide investors with tools to track specific investment strategies and mandates,” he noted.

He said the Zakat Index is aligned closely with the social pillar of environment, social and governance (ESG) and resonates with the broader objectives of Maqasid al-Shariah, which promote social justice and economic equity.

“By highlighting profitable companies that actively fulfil their zakat obligations, the Zakat Index aims to attract socially conscious investors, thereby increasing market participation and fortifying Malaysia’s status as a global Islamic financial hub,” he added.

Zakat contributions from the 27 PLCs currently included in the Zakat Index totalled RM233 million last year, up from RM197 million in 2022 and RM142 million in 2021.

-- BERNAMA