Muslim Investors Should Look Closer to Home: The Case for Asia
Halal investing opportunities outside of Western markets are more abundant and more tayyib too.
The Western bloc has forever lost its claim to moral superiority. No matter what politicians say or the media propaganda, their self-serving imperialist intentions are more apparent than ever. Needless to say, the impending demise of Western domination is not just political. The decline is also economical. The US, at the head of the bloc, is the primary cause.
America’s overt and covert operations to subdue the global order, run non-stop since the middle of the last century, have culminated in complicity in the ongoing genocide committed by Israel in Palestine. On top of this, the US administration continues to terrorise the rest of the world into submission through wars, withdrawal of aid, sanctions and tariffs.
Such imperialistic bullying, however, is no longer effective. As the US slides further and further into functional disrepair, there has been a lot of talk about the end of American exceptionalism. Investors are moving out of US equity markets, which this year have underperformed global peers by the widest margin since 1987.
The market rotation has so far favoured the EU where grand spending plans on defence and infrastructure have buoyed shares lately. I would argue, though, that real potential lies beyond Europe’s shores — in Asia, primarily China and Southeast Asia. It is these markets that are growing sustainably, as they should given their historical and human riches.
Retail investors who are brave enough to stick with promising international markets will eventually win. Muslim investors should be among the first to abandon the Western playbook.
China
By now, it has become abundantly clear that the US empire’s perpetually belligerent attitude towards China, the world’s top economy by real GDP, is nothing more than a wary fear and a sense of inferiority. Chinese tech, in particular, is challenging the American leadership, catching up rapidly and impressively despite a multitude of sanctions and bans. Importantly, government policy has turned fully supportive of the tech industry.
There are historical precedents that point to the possibility of Chinese stocks’ continued outperformance. However, the Chinese stock market is not just about fresh momentum but also attractive pricing. Undervaluation is still prevalent, especially when compared to prohibitively priced US equities.
For Muslim investors looking for halal stocks, China has plenty of offer. A number of China-focused Islamic indices, such as the MSCI China A Onshore Islamic Index and the Dow Jones Islamic Market China A 100 Index, contain ready shortlists of Shariah compliant stocks. Big names, like Alibaba and BYD, have previously been covered on Tayyib Finance.
Southeast Asia
The other sub-region Tayyib Finance regularly features is Southeast Asia. And for a good reason. It is home to major emerging economies — from Indonesia to Vietnam — that are growing briskly thanks to vast human potential, resources as well as tech enterprises. Their stock markets are active and regulated.
Yet Southeast Asia remains overlooked. Muslim investors, unless they are from the area, are mostly unaware of buying opportunities here. Not even prominent halal investing sites cover the local stock markets, despite the fact that they are chock-full of Shariah compliant companies.
It is notable that Shariah compliance screening in few large markets around Southeast Asia is formally conducted by stock exchange authorities. That includes, first and foremost, Malaysia — the global hub for Islamic finance — where the Shariah Advisory Council of the Securities Commission is in charge of screening stocks on Bursa Malaysia.
The other big market for halal investments is Indonesia whose exchange contains a segment known as IDX Islamic made up exclusively of compliant stocks. The Philippines is another ASEAN country that formally screens all of its listed companies for Shariah compliance using the services of IdealRatings based on the AAOIFI’s methodology.
Between these three countries, there are over 1,500 halal stocks at present. Most are in Malaysia: as of May 2025, 850 out of 1,056 securities are compliant, or 80% of all listed entities. Indonesia is fast converting: more than 90% of Indonesia’s equity market is now Shariah compliant which yields 614 halal stocks. The Philippines offers a much smaller but growing pool of Islamic securities — 53 as of March this year.
There are alternatives elsewhere too, notably Singapore and Thailand. Although in those jurisdictions Shariah screening is not yet a formal, national process, it is adequately taken care of by third-party providers such as FTSE and S&P.
Developed Asia
Of course, Asia is not limited to emerging economies. And on Tayyib Finance one other sub-region I like to look at is East Asia — Japan and Taiwan. For halal stocks in these countries, one has to browse through Islamic indices that focus on them or contain them as part of regional indices (like FTSE SGX Asia Shariah 100).
For Japan, these include MSCI Japan Islamic, FTSE Japan 100 Shariah, S&P Japan 500 Shariah and DJ Islamic Market Japan. In Taiwan, the options are FTSE TWSE Taiwan Shariah and DJ Islamic Market Greater China.
Takeaway
Thanks to the a rich variety of Islamic equity indices covering Asian markets, individually or thematically, it has become much easier to find prospective halal buys in the region. That is true to anyone looking for opportunities in China, the developed Asia as well as Southeast Asia. Exposure to the latter is also facilitated through big Islamic markets in Malaysia and Indonesia.
Obviously, responsible investors, Muslims among them, have to filter their lists through additional criteria, to ensure businesses they are buying are not involved in human rights violations or environmental degradation. Asian companies are not as egregious as many Western firms, but there are exceptions to every rule.
Disclaimer: Nothing you read on Tayyib Finance constitutes financial advice. Nor is there a guarantee of Shariah compliance of any particular stock at any particular time, since ‘Shariah compliance’ is fluid depending on the provider of judicial opinion and must be regularly affirmed. Do your own research.
East and Southeast Asia is where I lean. Although there are formal Islamic finance markets in some Gulf/Middle Eastern countries too, I prefer to avoid them due to their manifest betrayal of Muslim causes — from Palestine to Yemen to Sudan.