How to Screen BIST Stocks the Halal Way (2026)

In most markets, halal stock screening means choosing between competing methodologies and paying an app to apply one. In Turkey the state of play is better and simpler: a single national standard set by the TKBB Advisory Board governs every katilim fund, index and brokerage screen in the country, companies self-report compliance quarterly through KAFIF filings on KAP, and Borsa Istanbul turns the results into index membership lists you can read for free. Screening a BIST stock is not a research project; it is a lookup, plus judgment at the edges. Here is the full workflow.

Understand what the screen tests

The TKBB standard has two layers, detailed in our 33/33/5 explainer. First, activity exclusions: companies whose core business involves interest-based finance (banks, conventional insurers, leasing, factoring), alcohol, gambling, pork, tobacco, weapons, forward gold or FX dealing, or impermissible media and entertainment are out entirely, whatever their ratios. Second, financial thresholds for everyone else: interest-bearing debt below 33% of the greater of total assets or market capitalization, interest-earning assets below the same 33% line, and impermissible income below 5% of total revenue.

The lookup workflow

• Step 1: Check index membership. If the stock is in the BIST Katilim indices (KATLM covers all compliant names, KAT30 and KAT50 the large and mid caps), it passed the screen at the last review. The index lists are public via Borsa Istanbul.
• Step 2: Check the KAFIF filing. Companies file the Katilim Finans Ilkelerine Uygunluk Bilgi Formu quarterly on KAP, self-reporting the screening inputs. Reading the latest filing tells you how much headroom the company has under the thresholds.
• Step 3: Watch the margins. A company at 31% interest-bearing debt passed, but one bad quarter can push it out at the next review. If you want stability, prefer names with wide clearance rather than threshold-huggers.
• Step 4: At each index review, reconcile your holdings against the updated list, and manage exits for names that dropped out.

Or let the infrastructure do it

If maintaining the workflow sounds like a part-time job, Turkey offers three delegation levels. Full delegation: buy the Z30KP ETF and own the screened large-cap universe at a published 0.50%, with index reviews handling every exit automatically. Partial delegation: an active katilim equity fund (KPC, RBH) hires a manager to work within the screen. Enforced self-direction: a Kuveyt Turk Yatirim TradePlus account, where buy orders execute only for the roughly 240 compliant names, sells are unrestricted, and the platform physically cannot let you buy outside the screen. That last option is the sweet spot for stock pickers: your research, the market's compliance rails.

The judgment calls the lookup cannot make

Honest screening admits its edges. Purification: the 5% impermissible income allowance means compliant companies can still earn small haram income slices; katilim funds handle cleansing at fund level per committee guidance, while direct holders who want to purify estimate the impermissible share of dividends received and give it to charity. Threshold philosophy: 33% is the sector's considered line, not a revealed number, and investors following stricter personal standards can apply tighter cutoffs using the same KAFIF data. Sector nuance: defense-adjacent names and diversified holding companies sit in definitional gray zones the standard resolves case by case at reviews; if a name's inclusion surprises you, read its KAFIF filing rather than assuming either way.

What a screened portfolio behaves like

Excluding banks and insurers removes a large share of BIST's capitalization, so screened portfolios decouple from Turkish financials: they will lag the mainstream indices in bank-led rallies and hold up better when financials sell off. Concentration is the other structural fact, since the compliant large-cap universe leans on industrials and holding companies. Diversify across the screened universe deliberately, consider the equal-weighted Z30KE alongside cap-weighted exposure, and size Turkish equity as one sleeve of a wider halal portfolio, as we lay out in the TEFAS portfolio guide.

Frequently asked questions

Is the TKBB standard stricter or looser than AAOIFI?

Broadly parallel. The TKBB thresholds use 33% against the greater of total assets or market capitalization where AAOIFI practice uses 30-ish% screens, and both cap impermissible income at 5%. The activity exclusion lists are broadly consistent, with Turkish specifics like forward gold and FX dealing named explicitly. An investor comfortable with AAOIFI screening will find nothing alarming here, and the enforcement mechanism, quarterly disclosures feeding mechanical index reviews, is stronger than most AAOIFI-screened markets can claim.

What do I do with a stock that fails at a review?

Sell it within a reasonable period, as fund managers do, and purify any gains attributable to the non-compliant period if your standard calls for it. The practical discipline is calendar-based: reconcile holdings after each index review and act promptly, because the drift from small breach to entrenched holding is where good intentions go to die.

Can I screen foreign stocks the same way?

The logic travels; the infrastructure does not. KAFIF filings and Katilim indices cover BIST only. For foreign names you are back to methodology choice and manual ratio work, or you delegate to a screened foreign fund like KT Portfoy's KTJ, where the committee applies participation screening to global names inside a TEFAS wrapper.