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The Islamic Shariah principles for investment in stock market

The Islamic Shariah principles for investment in stock market PurposeBecause of chronic financial crises experienced during past several decades repeatedly and a failure to protect investors’ rights as a result, the world is looking for an alternative form of stock market for quite some time so that interests of all relevant stakeholders can be safeguarded. At the same time, from the perspectives of devout Muslims, the current form of stock market restricts a Muslim to make investments in the market because of several unsatisfying provisions from the viewpoint of the Islamic law known as Shariah. This study aims to provide the criteria under which conditions of the Islamic Shariah permit making investments in the stock market. Hand in hand with that primary discussion, it has been eluded briefly why the Islamic Shariah principles offer a better alternative against conventional practices of the stock market.Design/methodology/approachThis is a descriptive study based on the literature review.FindingsThis study explores the basic Islamic principles of investment in the stock market by revisiting the norms laid down by Shariah and current global practices of Islamic stock market and indexes.Originality/valueThis study will work as a guideline for investors and market authorities to understand the original Shariah rulings and the benchmark rulings for investment or establishing full-fledged Islamic stock markets, indexes and mutual funds. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Qualitative Research in Financial Markets Emerald Publishing

The Islamic Shariah principles for investment in stock market

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References (39)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1755-4179
DOI
10.1108/QRFM-09-2016-0029
Publisher site
See Article on Publisher Site

Abstract

PurposeBecause of chronic financial crises experienced during past several decades repeatedly and a failure to protect investors’ rights as a result, the world is looking for an alternative form of stock market for quite some time so that interests of all relevant stakeholders can be safeguarded. At the same time, from the perspectives of devout Muslims, the current form of stock market restricts a Muslim to make investments in the market because of several unsatisfying provisions from the viewpoint of the Islamic law known as Shariah. This study aims to provide the criteria under which conditions of the Islamic Shariah permit making investments in the stock market. Hand in hand with that primary discussion, it has been eluded briefly why the Islamic Shariah principles offer a better alternative against conventional practices of the stock market.Design/methodology/approachThis is a descriptive study based on the literature review.FindingsThis study explores the basic Islamic principles of investment in the stock market by revisiting the norms laid down by Shariah and current global practices of Islamic stock market and indexes.Originality/valueThis study will work as a guideline for investors and market authorities to understand the original Shariah rulings and the benchmark rulings for investment or establishing full-fledged Islamic stock markets, indexes and mutual funds.

Journal

Qualitative Research in Financial Markets – Emerald Publishing

Published: May 2, 2017

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