Short selling is the practice of selling investment securities such as stocks in which the sellers do not own the stocks or that sellers have borrowed from other.

1. Group Members:
1. Sman Tairos 230698
2. Simsit Ronkriya 230823
3. Mst Monira Parvin 230903
4. Siti Suhana Binti Idrus 231034
5. Fatin Nabilah Binti Omar Zakir 233250
Islamic Investment BWFS3013
Group Presentation

2. Islamic Investment BWFS3013
Presentation
Outline
Short
Selling
ETFS
REITS
Financial
Screening

3. SHORT SELLING
Short selling is the practice of selling investment
securities such as stocks in which the sellers do not
own the stocks or that sellers have borrowed from
other.

4. How does short selling work?

5. Why do investors short
selling?
• Investment Strategy
• Profit
• There are three key
important market
participants in a short
selling:
• Individual Investors
• Large Corporation
• Hedge Fund
Who are the participants?

6. An ETF, or exchange traded fund, is a marketable
security that tracks an index, a commodity, bonds or a
basket of assets like an index fund. Unlike mutual funds
an ETF trades like a common stock on a stock exchange.
Exchange Traded Fund

7. Experience Price Changes
The investors can know the actual price of the shares
through out the day as the price for ETFs changes through the day.
Daily Liquidity
Unlike the mutual fund the shares of ETFs can be bought and
sold at any time, thus ETFs contains better liquidity.
Lower Fees Than Mutual Fund
ETFs charges lower fees than mutual fund for managing
investors capital.
Why ETFs Attractive to Investors ??

8. REAL ESTATE INVESTMENT TRUST (REITS)

9. REAL ESTATE INVESTMENT TRUST (REITS)
SC Guidelines on REITs 2005 defines
REIT - “An investment vehicle that
invests or proposes to invest at least
50% of its total assets in real estate. An
investment in real estate may be by way
of direct ownership or a shareholding in
a single-purpose company whose
principal assets comprise real estate”
Islamic REIT - “In general, an Islamic
REIT is a collective investment
scheme in real estate, in which the
tenant(s) operates permissible
activities according to the Syariah”

10. TYPE OF REITS INVESTMENT
• Direct Investments
• Indirect Investments or Real Estate Funds
• Time-Share concept
• Sale & Leaseback funds
• Land Banking
• Real Estate Securities
• Real Estate Investment Trusts (REIT)

11. COMPARISON OF REIT AND i-REIT
REIT FEATURES ISLAMIC REIT
No necessity for any Shariah
commitee/advisor
Shariah
Comittee/Advisor
Should assign Shariah comittee to certify
comformity with Shariah conditions
Conventional insurance with insurance
companies as permitted by trustee
Insurance for
properties
Manager has to be concerned regarding
availabilitty of Islamic insurance before
going to conventional insurance
No limitation Financing limitation Financing should be Shariah compliant
No restriction. Anything is legal. Sources of income Restricted to Shariah compliant. Avoiding
activities of gambling, riba and maisir.

12. FINANCIAL SCREENING

13. Financial screening process is screening process conducted to
check the revenue of the company whether they are free from
prohibited income or they are involve with it but with an
acceptable ratio that has been permitted by Shariah scholar.
WHAT IS FINANCIAL SCREENING?

14. Purpose of Financial Screening
• To determine the percentage of a company’s profit is derived
from interest-bearing accounts.

15. SCREENING CRITERIA
Quantitative
Assessment
Shariah Screening
Methodology( Security
Commission)
Business Activity
Benchmarks
5%
20%
Financial Ratio
Benchmarks
33%

16. Business Activities Benchmark
• The 5% benchmark would be applicable to the following
business activities:
Conventional
Banking
Insurance
Interest income
from conventional
accounts and
instruments
Gambling
Liquor and liquor-
related activities
Pork and pork-
related activities
Non-halal food
and beverages
Tobacco and
tobacco-related
activities

17. Business Activities Benchmark
• The 20% benchmark would be applicable to the following
activities:
Hotel and resort
operations
Share trading
Stockbroking
business
Rental received
from Shariah non-
compliant
activities
other activities
deemed non-
compliant
according to
Shariah

18. Financial Ratio Benchmarks
i) Cash over Total Assets
Cash will only include cash placed in conventional accounts and
instruments, whereas cash placed in Islamic accounts and instruments
will be excluded from the calculation.
ii) Debt over Total Assets
Debt will only include interest-bearing debt whereas Islamic
debt/financing or sukuk will be excluded from the calculation.Both
ratios, which are intended to measure riba and riba-based elements
within a company’s balance sheet, must be lower than 33%.