Halal stocks Pakistan investors can buy are not picked by guesswork: the Pakistan Stock Exchange runs two Shariah-compliant indices, the KMI-30 and the KMI All Share Islamic Index, and every company in them has passed a published set of business and financial tests. This guide explains how that screening works, what changed in 2026, and what the KMI-30 looks like in our data as of 3 November 2026.
What makes a stock halal on the PSX
A company’s shares are treated as Shariah-compliant when its main business is permissible and its balance sheet and income are not built on interest or other prohibited activities. Because almost every listed company has some bank deposits or loans, the screening does not demand zero interest exposure. Instead it sets limits that a company must stay within.
On the PSX the screening is done by research analysts at Al Meezan Investment Management, under the oversight of a Shariah board, and the methodology is approved by the Securities and Exchange Commission of Pakistan (SECP). According to SECP’s press release of 26 February 2026, PSX, Al Meezan and Meezan Bank jointly submitted the methodology, which SECP first approved in May 2024 under the Shariah Governance Regulations, 2023.
The six Shariah screening tests
A stock must pass all six tests below to enter either index. The rules are taken from PSX’s own brochures for the All Share Islamic Index and the KMI-30 Index.
| Test | Rule in the PSX methodology |
|---|---|
| 1. Core business | Must not be against Shariah: conventional banks, insurance and leasing, alcohol, pork, gambling and similar businesses are excluded. The All Share Islamic Index also excludes tobacco and explosives on ethical grounds. |
| 2. Interest-bearing debt to total assets | Less than 37% in the PSX brochures; SECP announced a cut to 33% in February 2026 |
| 3. Non-compliant investments to total assets | Less than 33% |
| 4. Non-compliant income to total revenue | Less than 5% (interest income, dividends from non-compliant companies and similar) |
| 5. Illiquid assets to total assets | At least 25% (plant, machinery, inventory and other real assets) |
| 6. Market price per share | Must be at least equal to net liquid assets per share |
Net liquid assets per share means total assets minus illiquid assets and all liabilities, divided by the number of shares. The idea behind tests 5 and 6 is that a share should represent a stake in a real business, not just a claim on cash and receivables.
What changed in February 2026
On 26 February 2026 SECP announced revisions to the screening criteria for the PSX-KMI All Share Index. The main points in its press release were:
- The limit for interest-bearing debt to total assets was reduced from 37% to 33%.
- Qualifying companies will receive a Shariah compliance rating of three, four or five stars.
- The list of compliant companies will be published with a five-working-day window for evidence-based objections.
- Newly listed companies can be included between reviews, subject to approval by the KMI Index Committee.
SECP also advised PSX to consider lowering the non-compliant investments limit from 33% to 30%, moving to quarterly index updates and automating data collection. Those were suggestions, not adopted rules, at the time of the release. The release did not give an effective date for the tighter debt limit, so check PSX’s latest index notices for which rules apply to the current list.
KMI-30 vs KMI All Share: the difference
The KMI All Share Islamic Index includes every listed company that passes the screening, with no cap on the number of members. Companies with a free float below 5% or that traded on fewer than 75% of days are included but disclosed separately, and mutual funds are not eligible.
The KMI-30 is a narrower index of a maximum of 30 compliant companies. According to the PSX KMI-30 brochure, eligible companies must be in the Central Depository System, have at least two months of listing history and a one-year operating track record, a free float of at least 5% and have traded on at least 75% of trading days. Companies on the defaulters’ counter, or suspended in the previous six months, are left out. The remaining stocks are ranked 50% on free-float market value and 50% on impact cost (how cheaply they can be traded), and the top 30 are included. No single stock can make up more than 12% of the index at recomposition.
Both indices are reviewed twice a year. The brochures describe revisions based on 31 December and 30 June accounts, taking effect around 15 May and 15 November.
The KMI-30 in numbers
On 3 November 2026 the KMI-30 closed at 240,580.98 and the KMI All Share Index at 65,309.15. In our data the 30 members have a combined market value of about Rs 7,198 bn. 27 of them are also in the KSE-100, where together they made up about 52% of the index weight that day.
The index is heavy in energy and commodities: oil and gas exploration companies alone account for about 37% of the members’ combined market value. The ten largest members are below.
| Stock | Company | Sector | Market cap | P/E | Dividend yield | Pulse Score (out of 100) |
|---|---|---|---|---|---|---|
| OGDC | Oil and Gas Development | Oil and gas exploration | Rs 1,306 bn | 5.0x | 5.6% | 73.1 |
| MEBL | Meezan Bank | Islamic bank | Rs 952 bn | 10.0x | 5.8% | 54.9 |
| FFC | Fauji Fertilizer | Fertilizer | Rs 824 bn | 9.0x | 7.6% | 80.5 |
| MARI | Mari Energies | Oil and gas exploration | Rs 787 bn | 8.5x | 4.3% | 58.4 |
| LUCK | Lucky Cement | Cement | Rs 587 bn | 6.6x | 1.3% | 68.8 |
| PPL | Pakistan Petroleum | Oil and gas exploration | Rs 579 bn | 5.6x | 5.6% | 77.2 |
| ENGROH | Engro Holdings | Investment companies | Rs 319 bn | 7.3x | – | 71.5 |
| EFERT | Engro Fertilizers | Fertilizer | Rs 269 bn | 10.9x | 6.9% | 55.5 |
| HUBC | Hub Power | Power | Rs 256 bn | 5.0x | 10.6% | 68.9 |
| SYS | Systems | Technology | Rs 168 bn | 13.8x | 1.8% | 58.9 |
The Pulse Score is our score out of 100 that sums up a company’s growth, financial stability, valuation, working capital and cash flow from its reported results. It is an estimate of business quality, not a forecast or a Shariah rating. The median Pulse Score of the 30 KMI-30 members is 65.1, compared with 55.2 for the other stocks we cover, which may partly reflect the debt limits in the screening. For the full list of all 30 members with their ratios, see our KMI-30 stocks list.
How to invest in halal stocks in Pakistan
- Open a brokerage and CDC account. The process is the same as for any PSX investor; our guide on opening a CDC account and choosing a broker walks through it.
- Check the current compliant list. Use the latest KMI All Share list published by PSX, not an old copy, because companies move in and out at each review.
- Do your usual research. Shariah compliance says nothing about whether a business is good value. Look at earnings, debt, dividends and valuation, for example with our PSX stock screener guide.
- Ask about dividend purification. The PSX brochures do not set out how investors should treat the small share of income a compliant company may still earn from interest. Ask a qualified Shariah adviser or your Islamic fund manager how to handle this.
If you prefer not to pick stocks yourself, Shariah-compliant equity funds offered by asset management companies are another route; MUFAP publishes their performance.
Frequently asked questions
How do I know if a PSX stock is halal?
Check whether it is a member of the KMI All Share Islamic Index in the latest list published by PSX. Members have passed the six business and financial tests described above.
What is the debt limit for Shariah-compliant stocks in Pakistan?
The PSX brochures set interest-bearing debt below 37% of total assets. SECP announced on 26 February 2026 that this limit is being reduced to 33%. Check PSX’s latest notice for the limit used in the current review.
Are bank stocks halal?
Conventional banks fail the business test and are excluded. Islamic banks can qualify: Meezan Bank (MEBL) was a KMI-30 member in our latest data.
How often is the KMI-30 list changed?
Twice a year. According to PSX’s brochure, revisions are based on 31 December and 30 June accounts and take effect around 15 May and 15 November. SECP has also suggested PSX consider quarterly updates.
Does a halal stock make a good investment?
Not by itself. The screening only checks compliance. A compliant company can still be expensive, loss-making or risky, so look at its results, debt and valuation before investing.
Use the free Market Pulse Hub dashboard to check any of these stocks yourself, and join the waitlist to get new tools and reports first.
Bilal, Market Pulse Hub
Figures are from company results, exchange data and our calculations up to 3 November 2026 and will change as new data arrives. This article is for education only and is not investment advice.