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Participation Index (BIST Participation)

Participation indices are Borsa Istanbul indices made up of shares of companies whose activities comply with interest-free finance principles. Borsa Istanbul’s participation indices include BIST Participation All (XKTUM), BIST Participation 100 (XK100), BIST Participation 50 (XK050) and BIST Participation 30 (XK030).
Contents
  1. 1.Key points
  2. 2.How it works
  3. 3.Interpretation
  4. 4.Pitfalls
  5. 5.Official sources
  6. 6.Frequently asked questions

Key Points

  • They are calculated to make it easier for investors who follow interest-free finance principles to choose among eligible companies.
  • Participation indices serve as benchmarks for participation funds and as the stock universe for interest-free investors.
  • eligibility is not permanent; if a company’s debt structure or income mix changes it may drop out at the next review.

How It Works

companies pass a two-step screen: eligibility of the business line (excluding, for example, interest-based finance, alcohol and gambling) and financial ratios such as interest-bearing debt and interest income staying below set thresholds. The list of eligible companies is updated periodically.

Interpretation

Participation indices serve as benchmarks for participation funds and as the stock universe for interest-free investors. A stock entering or leaving the index can affect demand from this investor group.

Pitfalls

eligibility is not permanent; if a company’s debt structure or income mix changes it may drop out at the next review. Inclusion does not make a company attractive as an investment. Rely on Borsa Istanbul announcements for current eligibility.

Official Sources

Official regulation and sources the definition is based on.

Pages Where This Term Appears

Related Terms

Frequently Asked Questions

Participation indices are Borsa Istanbul indices made up of shares of companies whose activities comply with interest-free finance principles.

companies pass a two-step screen: eligibility of the business line (excluding, for example, interest-based finance, alcohol and gambling) and financial ratios such as interest-bearing debt and interest income staying below set thresholds. The list of eligible companies is updated periodically.

Prepared by: Yatırımcı.AI Research TeamLast reviewed: Method: MethodologyEditorial policy