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The Role of the Stock Exchange in An Islamic Economy دور البورصة في الاقتصاد الإسلامي

Author

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  • MOKHTAR M. METWALLY

    (Professor in the Department of Economics, King Saud University, Riyadh, Saudi Arabia)

Abstract

In an Islamic economy where interest bearing loans are prohibited and where direct participation in business enterprise, with its attendent risks and profit sharing, is encouraged, the existence of a well functioning Stock Exchange is very important. It would allow for the mobilization of savings for investment and provide means for liquidity to individual shareholders. However, existing Stock Exchanges in non-Islamic economies have many drawbacks. They generate practices such as speculation and fluctuations in share prices which are not related to the economic performance of enterprises. These practices are inconsistent with the teachings of Islam. --

Suggested Citation

  • Mokhtar M. Metwally, 1984. "The Role of the Stock Exchange in An Islamic Economy دور البورصة في الاقتصاد الإسلامي," Journal of Research in Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 2(1), pages 19-28, January.
    • Handle: RePEc:abd:crieja:v:2:y:1984:i:1:no:2:p:19-28
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    Cited by:

    1. Hearn, Bruce & Piesse, Jenifer & Strange, Roger, 2012. "Islamic finance and market segmentation: Implications for the cost of capital," International Business Review, Elsevier, vol. 21(1), pages 102-113.
    2. Mohsin S. Khan & Abbas Mirakhor, 2009. "Monetary Management in an Islamic Economy الإدارة النقدية في اقتصاد إسلامي," Chapters of books published by the Islamic Economics Institute, KAAU or its faculty members., in: Islamic Economics Institute (ed.),Issues in the International Financial Crisis from an Islamic Perspective-05 قضايا في الأزمة المالية الدولية من منظور إسلامي, edition 1, chapter 12, pages 209-232, King Abdulaziz University, Islamic Economics Institute..
    3. Hasnie, Syed Sharjeel Ahmad & Collazzo, Pablo & Hassan, M. Kabir, 2022. "Risk assessment of equity-based conventional and islamic stock portfolios," The Quarterly Review of Economics and Finance, Elsevier, vol. 85(C), pages 363-378.
    4. Hearn, Bruce & Piesse, Jenifer & Strange, Roger, 2011. "The role of the stock market in the provision of Islamic development finance: Evidence from Sudan," Emerging Markets Review, Elsevier, vol. 12(4), pages 338-353.
    5. El-Ashkar, Hmad Abdel Fattah, 1995. "Towards An Islamic Stock Exchange In A Transitional Stage," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 3, pages 79-112.

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