Pakistan’s stock market has undertaken a significant reshaping of its Shariah-compliant universe, as the Pakistan Stock Exchange (PSX) announced updates to the PSX-KMI All Share Islamic Index. The semiannual rebalancing, effective December 2, 2025, includes the addition of 35 companies and the removal of 12, bringing the total number of constituents to 281. The changes follow a detailed review of corporate compliance with Shariah principles.
The recomposition covers the period from January 1 to June 30, 2025, and involves rigorous Shariah financial screening. Factors such as debt ratios, non-compliant income, investment thresholds, and liquidity metrics are assessed to ensure that all included companies meet Islamic finance standards. The review is closely watched by fund managers and investors who maintain Shariah-compliant portfolios, as it often prompts short-term adjustments in liquidity and trading activity across affected stocks.
Among the incoming companies are several large-cap names expected to boost the index’s profile, including Air Link Communication Ltd., Attock Cement Pakistan Ltd., Engro Powergen Qadirpur Ltd., Kohat Cement Co., National Refinery Ltd., and Siemens Pakistan Engineering Co. These additions also encompass firms from textiles, chemicals, and manufacturing sectors, highlighting the diversity within the Islamic investment universe.
On the other hand, removals from the index include Bestway Cement Ltd., Unity Foods Ltd., Sapphire Fibres Ltd., Abdullah Shah Ghazi Sugar Mills Ltd., and Cordoba Logistics & Ventures Ltd. The majority of these exclusions were driven by non-compliance with Shariah principles, with some companies entering the exchange’s non-compliant segment. The adjustments reflect the PSX’s commitment to maintaining a transparent and credible Shariah-compliant investment benchmark.
Islamic equity funds, Shariah-screened portfolios, and individual investors closely monitor such updates to ensure their holdings remain compliant. Portfolio managers typically rebalance allocations around the reconstitution period, which can create temporary volatility in the trading of affected stocks. Investors often adjust exposure based on the revised list, influencing both liquidity and short-term market sentiment.
The PSX-KMI All Share Islamic Index has become an important benchmark for Shariah-compliant investing in Pakistan, providing both domestic and international investors with a structured approach to identify eligible equities. The semiannual review strengthens the credibility of the index and signals the ongoing growth and sophistication of Pakistan’s Islamic finance market.
The latest update underscores the exchange’s proactive role in supporting Shariah-compliant investment opportunities and enhancing market transparency. By maintaining a robust screening process and periodic rebalancing, PSX continues to promote investor confidence and foster the development of ethical and responsible investment practices within the country’s capital markets.
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