Is Grupo Aval Acciones y Valores (AVAL) stock Halal?

Grupo Aval Acciones y Valores S.A. is a prominent financial conglomerate based in Colombia, offering a diverse range of banking and financial services primarily in Latin America. Its primary function is to serve as a holding company for an assortment of renowned financial institutions, including Banco de Bogotá, Banco de Occidente, and Corficolombiana, among others. Grupo Aval’s operations span across commercial banking, investment banking, asset management, and insurance services, thereby influencing a broad gamut of sectors within the financial industry. For Muslim investors, though, the most pressing question is simpler: is Grupo Aval Acciones y Valores a Halal investment?

Is Grupo Aval Acciones y Valores Shariah compliant?

Finance is the sector where Shariah screening does the most work, because Riba is not incidental here, it can be the product itself. Grupo Aval Acciones y Valores passes the business activity screen only if its revenue comes from permissible services rather than lending at interest, and the financial screens of AAOIFI Shariah Standard No. 21 still apply in full.

Does Grupo Aval Acciones y Valores pass the business activity test?

The activity screen is only part of the picture this month: Grupo Aval Acciones y Valores currently fails the non-permissible income, interest-bearing investments and interest-bearing debt screens, so the overall verdict is not compliant regardless of the business itself. The watch item in this sector is the sharpest of all: revenue must come from permissible services, not from lending at interest.

Is Grupo Aval Acciones y Valores' income Halal?

No. Grupo Aval Acciones y Valores' income from impermissible sources currently exceeds AAOIFI's 5% revenue ceiling, which makes the stock non-compliant on this screen regardless of the others. The screen is reassessed monthly, so the status can change when new financial statements arrive.

Does Grupo Aval Acciones y Valores meet AAOIFI's debt and investment ratio requirements?

No. Both ratios currently breach the 30% caps: interest bearing investments and interest bearing debt each exceed the limit AAOIFI permits for a Halal investment. The ratios move with the share price as well as the balance sheet, and our Shariah Supervisory Board has AVAL re-screened every month.

Tabadulat is an ADGM regulated brokerage whose license covers Shari'a Compliant Regulated Activities, as the FSRA permission names them. New to the terminology? Gharar and Maysir, Sukuk, Zakat and purification are all explained in plain English.

New to the four screens? Read What is Riba? A Clear Guide for Ethical Muslim Investing