--- title: "HSBC's Islamic fund can't sell its $38 million Palantir stake; the S&P sharia screen owns the sell button" description: "HSBC promised a swift review of its Islamic fund's $38.3 million Palantir stake after pressure from Nest and the People's Pension. But a passive index tracker cannot sell on its own: the real decision sits with an S&P sharia screen and the standard-setter behind it, and that is the flow event PLTR holders should price into Monday's print." publisher: "The Inference" section: "Economy" published: 2026-11-01T16:32:03.365Z modified: 2026-11-01T16:32:03.365Z canonical: https://theinference.org/article/hsbc-s-islamic-fund-can-t-sell-its-38-million-palantir-stake-the-s-p-sharia-screen-owns-the-sell-button language: en keywords: "Palantir, HSBC, Index Funds, Islamic Finance, Pensions" --- # HSBC's Islamic fund can't sell its $38 million Palantir stake; the S&P sharia screen owns the sell button > HSBC promised a swift review of its Islamic fund's $38.3 million Palantir stake after pressure from Nest and the People's Pension. But a passive index tracker cannot sell on its own: the real decision sits with an S&P sharia screen and the standard-setter behind it, and that is the flow event PLTR holders should price into Monday's print. HSBC has [promised a "swift" review of the Palantir shares](https://hyphenonline.com/2026/10/20/hsbc-halal-fund-38m-investment-palantir-review/) held by its Islamic Global Equity Index Fund, the UK's largest halal fund, after two of Britain's biggest pension providers objected [1]. The review sounds like HSBC holds the exit door. It does not. The fund passively tracks the [S&P Global](https://theinference.org/markets/companies/s-and-p-global) 1200 Shariah Select Index, a ready-made sharia screen it only adopted in March [1], so the bank can drop [Palantir](https://theinference.org/markets/companies/palantir) only by overriding the index or pressing S&P to change the screen [2]. The real decision-maker is the methodology, and the fight over it has just moved into public. ## The fund cannot sell what the index keeps Hyphen revealed on October 13 that the fund bought $38,338,000 of Palantir shares in the first half of 2026 [1]. Nest, the UK's largest workplace pension provider, runs a sharia fund that had 33,139 savers as of July 2025 [1]. It put 70% of that money into HSBC's fund, and the People's Pension, with more than seven million members, also raised concerns [1]. HSBC then said it would review the matter with independent expert advisers [3]. Sharia screening checks what a company sells, not what its customers do with it. A firm passes if little of its income comes from alcohol, gambling, weapons or interest, with tainted profits given to charity [1]. Palantir fits that box as a technology company, even though it signed a strategic partnership with Israel's Ministry of Defense in January 2024 for "war-related missions" [1]. ## Two index houses, two answers on defense The gap between providers is the point: S&P's standard sharia indices do not directly exclude defense companies, while Dow Jones Islamic Market indices do [4]. A Durham University finance professor, Muhammed Ebrahim, told Al Jazeera the screens assess declared principal activities and do not trace a product's end use [4]. In a passive fund, the screen is the portfolio manager. ## The trigger sits with the standard-setter, not HSBC That is why the most consequential exchange of the past fortnight happened at a London Islamic finance summit, not at the bank. Dr Najib Al Aswad of the Islamic Finance Capacity and Advisory Bureau asked Mufti Taqi Usmani, chair of the sharia board of Aaoifi, the Bahrain-based body that sets Islamic finance standards globally, whether Muslims may hold a company supplying technology to an army "killing our brothers and sisters". Usmani answered that it depends, but when a buyer is certain the product will be used "in a haram way to harm others", holding it is haram [1]. ## The rule change is the sell order If Aaoifi or S&P tightens the screen in response, every passive sharia product tracking their methodology [becomes a forced, non-price-sensitive seller of Palantir at once](https://theinference.org/article/lg-electronics-ai-cooling-orders-passed-2-1-billion-index-funds-must-sell-113-8-billion-won-in-december). Exclusion from a major screened fund creates selling pressure regardless of how the underlying business performs [5]. HSBC's own March switch to a new parent index shows these screens get changed and swapped [1], and [Dow Jones's defense exclusion is an off-the-shelf exit](https://www.msn.com/en-us/news/world/how-hsbc-s-sharia-fund-invested-millions-in-israeli-war-linked-firms/ar-AA2fAJNM) [4]. ## The stake is noise; the precedent is not The money itself is small: the Palantir stake sits inside a fund of roughly $9 billion against a market cap near half a trillion dollars [2]. *Chart: **Palantir is not even the halal fund's biggest Israel-linked buy** Bars ranking five firms by the value of shares HSBC's Islamic Global Equity Index Fund bought in the first half of 2026: Palantir $38.3 million, RTX $35.7 million, Analog Devices $20.3 million, Honeywell $18.9 million, Rolls-Royce $17.6 million, with Palantir highlighted.* *H1 2026 share purchases by HSBC's Islamic Global Equity Index Fund in five firms Al Jazeera links to Israel's military, in US$ millions. [4]* Al Jazeera counted more than $130 million of the fund's first-half purchases across five firms linked to Israel's military [4]. The signal, not the size, is what PLTR holders should price. Palantir reports its third quarter on Monday November 2, [guided to $2.16 billion of revenue](https://finance.yahoo.com/markets/stocks/articles/palantir-wins-knox-federal-partnership-202024907.html) [6]. The stock closed last week at 98 times forward earnings [6], and [options price a 13% move either way around the print](https://coincentral.com/palantir-pltr-stock-what-wall-street-expects-from-earnings-monday/) [7]. At that multiple, a register event matters more than it would for a company the market prices on cash. *Chart: **Palantir's revenue has nearly tripled in two years; Monday's guide is $2.16 billion** Line chart of Palantir's quarterly revenue rising from $0.63 billion in the first quarter of 2024 to $1.94 billion in the second quarter of 2026, with a guided $2.16 billion estimate for the third quarter of 2026.* *Palantir quarterly revenue, Q1 2024 to Q2 2026, in US$ billions, from its SEC filings; the Q3 2026 point is the company's own guidance of $2.16 billion, drawn as an estimate. Sources: [8], [6]. [8][6]* ## Savers who wait for the screen change pay the price The cost falls asymmetrically. A saver who switches funds now chooses freely. A saver who waits for Aaoifi or S&P to act exits at whatever price follows the forced selling, because [passive money cannot front-run the rule change it waits for](https://theinference.org/article/calpers-cut-its-magnificent-seven-stake-26-while-blackrock-s-fink-counts-on-index-buyers-who-cannot-leave). Watch two things: whether HSBC's review touches the index or only its own committee, and whether the standard-setter responds. The capability is not on trial here; the register is. And for as long as the screen holds, it is the screen, not HSBC's committee, that owns the sell button. ## Takeaway HSBC's halal fund cannot sell Palantir on its own; the S&P sharia screen and Aaoifi's methodology hold the exit, and one rule change would make every passive tracker a forced seller at once. ## Sources 1. [Hyphen, "HSBC to review 'halal' fund's $38m investment in Palantir shares after Hyphen exposé", 20 October 2026](https://hyphenonline.com/2026/10/20/hsbc-halal-fund-38m-investment-palantir-review/) 2. [FinanceFeeds, "Palantir (PLTR) Stock Today: Bull and Bear Case as HSBC Reviews It for a $9 Billion Islamic Fund", 21 October 2026](https://financefeeds.com/palantir-pltr-stock-193-hsbc-islamic-fund-review-bull-213-bear-186/) 3. [Middle East Eye, "HSBC to review Islamic fund's $38m investment in Palantir", 21 October 2026](https://www.middleeasteye.net/news/hsbc-review-islamic-funds-38m-investment-palantir) 4. [Al Jazeera (via MSN), "How HSBC's Sharia fund invested millions in Israeli war-linked firms", 19 October 2026](https://www.msn.com/en-us/news/world/how-hsbc-s-sharia-fund-invested-millions-in-israeli-war-linked-firms/ar-AA2fAJNM) 5. [GuruFocus (via Yahoo Finance), "Palantir Faces a New Institutional Ownership Risk", 20 October 2026](https://finance.yahoo.com/markets/stocks/articles/palantir-faces-institutional-ownership-risk-130416099.html) 6. [Yahoo Finance, "Palantir Wins Knox Federal Partnership, Gains 4%", 19 October 2026](https://finance.yahoo.com/markets/stocks/articles/palantir-wins-knox-federal-partnership-202024907.html) 7. [CoinCentral, "Palantir (PLTR) Stock: What Wall Street Expects from Earnings Monday", 1 November 2026](https://coincentral.com/palantir-pltr-stock-what-wall-street-expects-from-earnings-monday/) 8. [Palantir, quarterly figures from its SEC filings, retrieved 1 November 2026](https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=0001321655) --- HSBC's Islamic fund can't sell its $38 million Palantir stake; the S&P sharia screen owns the sell button — The Inference. Canonical: https://theinference.org/article/hsbc-s-islamic-fund-can-t-sell-its-38-million-palantir-stake-the-s-p-sharia-screen-owns-the-sell-button