[HONG KONG, October 26, 2023] Micro Connect Group (“Micro Connect”) is pleased to announce that the Shariah Supervisory Board at Amanie Advisors (“Amanie”), an award-winning Shariah advisory firm, has deemed Micro Connect (Macao) Financial Assets Exchange (“MCEX”) Shariah-compliant, allowing the offerings of Shariah-compliant products on the platform. These products will be one of the first Shariah-compliant products offered in East Asia, further strengthening MCEX’s appeal to Islamic investors.
The certification recognizes that Micro Connect’s revenue sharing products are in line with Islamic Law, including being non-interest bearing, and approves the company’s Shariah-compliant screening methodology.
Being certified as Shariah-compliant enables MCEX to expand its membership landscape, opening the doors to Islamic investors looking to invest in the cash flows of China’s micro and small businesses. MCEX members will be able to invest in Shariah-compliant DRPs (“Daily Revenue Portfolios”, baskets of Daily Revenue Obligations (DROs) which are individual assets that entitle investors to the cash flows of an individual small business in China) and receive daily revenue shares of China’s Shariah-compliant small businesses. This certification also adds credibility to DRPs, particularly in Muslim-majority markets, and accelerates the exchange’s globalization efforts.
“We are delighted to collaborate with Amanie Advisors in developing a methodology to tailor-make Shariah-compliant DRPs for Islamic investors, an important group in today’s capital markets. MCEX is committed to providing alternative investment opportunities to global investors who seek to make a breakthrough in China’s impact investing,” said Charles Li, Chairman of Micro Connect and MCEX.
Micro Connect has developed a Shariah-compliant screening methodology that filters out non-compliant businesses in the four sectors of retail, services, food & beverage, and culture & sports. The methodology adds a new layer to an already extremely distributed and diversified asset class. With over 10,000 DROs in over 100 different categories in all provinces and over 240 cities in China (and to be expanded to cover other Asian markets in 2024), Micro Connect can now apply even more granular labelling to each individual investment.
The methodology will also enable issuers looking to issue Shariah-compliant DRPs on MCEX to follow a verification process with the platform and Amanie. Shariah-compliant DRPs would only consist of Shariah-compliant DROs / stores screened under such methodology. Daily Revenue Portfolios are products offered on MCEX.
For more information, please refer to mcex.mo.
About Micro Connect
Micro Connect Group is committed to connecting global capital with small businesses. Micro Connect Macao Financial Assets Exchange (MCEX) officially started operation on August 3, 2023. Based in Macao, it’s an international exchange of revenue sharing products. The exchange is Macao’s new exploration to promote modern financial development and address the financing difficulties of small businesses through digitization and financial innovation. By the end of August, Micro Connect had invested over RMB 2 billion in more than 10,000 micro and small stores.
Founded in 2005, Amanie Advisors is a leading Shariah advisory firm specializing in Islamic finance solutions. It has provided Shariah advisory services for renowned international banks, financial indexes, and investment institutions, including the Hang Seng Islamic China Index Fund and Value Partners’ Shariah China A-Shares ETF.