By Yakubu LAAH InvestAdvocate

Lagos (INVESTADVOCATE)- The Nigerian Stock Exchange (NSE) announced recently that three (3) stocks, Dangote Flour Mills Plc, Japaul Oil & Maritime Service Plc and Honeywell Flourmills Plc may likely fail the screening exercise it carried out on 15 companies in the NSE Lotus Islamic Index (NSE LII).

This is contained a Press Statement posted on the website of the NSE and made available by Dante Ibidapo Martins, Head, Corporate Communication.

Apart from the NSE LII, the screening was also conducted on other Shari’ah compliant companies using their 2012 year end financial statements, the result of which saw some stocks likely failing the screening exercise.

The NSE affirmed that possible replacements of the failing stocks are five (5) possible companies that have passed all Islamic screening as well as liquidity and market capitalisation criteria.

The five (5) companies are CAP Plc, Julius Berger Nigeria Plc, Presco Plc, Dangote Sugar Refinery Plc and Redstar Express Plc.

According to the NSE, the fifteen companies that will make the NSE

LII list and Market Capitalisations will be made public before the end of the month, and before the index rebasing date of July 1, 2013.

“All the companies that will appear in the Index have been thoroughly screened by Lotus Capital Halal Investment, in accordance with a methodology approved by an internationally-recognized Shari’ah Advisory Board comprising of renowned Islamic scholars.” The NSE said.

As earlier reported, NSE and Lotus Capital Limited launched the certified Shari’ah-compliant index in July 2012, to cater for investors with a preference for ethical/Shari’ah compliant investments.

Also, the NSE LII tracks the performance of 15 Shari’ah compliant equities which have met the eligibility requirements of a renowned Shari’ah Advisory Board. “The component stocks are rigorously screened and reviewed bi-annually to ensure their continuous compliance for inclusion in the index” the NSE affirmed.

The NSE LII was the first index created to track the performance of Shari’ah-compliant equities on the floor of the bourse, with the objective of increasing the breadth of the market and creating an important benchmark for investments as the alternative non-interest investment space widens.