RAK Ceramics, the world's biggest producer of ceramics and tiles, received Sharia-compliance certification for its shares, which will help widen its investor base.
Dar Al Sharia, an advisory body that works with government entities and private sector companies in the UAE and beyond, certified the company’s shares for the “purpose of trading and investment”, RAK Ceramics said in a statement to the Abu Dhabi Securities Exchange, where its shares trade.
Following a quarterly review of the ceramics manufacturer in Ras Al Khaimah, the certification body said the company’s activities and its financial ratios are "within the acceptable limits" of Sharia standards.
Companies usually seek Sharia certification to broaden investor base, opening an avenue for those who primarily deal through brokerage arms of Islamic banks and invest in equities deemed as adhering to Islamic principles of investing. Such certifications also help improve liquidity and increase volumes of trading in a company's stock, which in turn attracts more institutional investors.
Adnoc Distribution, the UAE’s largest fuel and convenience retailer, was also granted Sharia-compliance certification for its shares last month.
RAK Ceramics, reported a 37 per cent rise in its second-quarter profit as cost of financing dropped. Net profit attributable to shareholders reached Dh61.2 million from the year earlier, the company said in a filing to ADX. Cost of financing during the reporting period declined to Dh23.9m from Dh32.3m reported at the end of the second quarter of 2018.
The company in May said it remains committed to investments in Saudi Arabia, the biggest GCC economy, and discussions on land and gas allocation are under way for the expansion of its production facilities. The first phase of expansion would add approximately 10 million square meters per year to the company’s tile production capacity in the kingdom.
