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From Screening to Compliance Strategies: The Case of Islamic Stock Indices with Application on “MASI”

Author

Listed:
  • KAFOU, ALI

    (National School of Trade and Management, Agadir, Morocco)

  • CHAKIR, AHMED

    (National School of Trade and Management, Agadir, Morocco)

Abstract

The aim of this paper is to study the screening methodologies, as practiced by the mainstream Islamic stock market indices (ISI), through their application on the Moroccan All Shares Index (MASI). Thus, the possibility of providing the Casablanca stock exchange with its own Sharī‘ah-compliant stock index will be studied. First, the specific processing to construct ISI will be explained. Then, the screening is performed based on the methodological rules set by the mainstream ISI. The use of screens, as recommended by these indices’ Sharī‘ah committees, leads to different decisions about rejection or acceptance of stocks in the constructed index. This leads, in turn, to a plurality of ISI even when created using the same starting investable universe. Finally, compliance strategies were presented and applied to the MASI.

Suggested Citation

  • Kafou, Ali & Chakir, Ahmed, 2017. "From Screening to Compliance Strategies: The Case of Islamic Stock Indices with Application on “MASI”," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 25, pages 55-84.
    • Handle: RePEc:ris:isecst:0162
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    References listed on IDEAS

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    Cited by:

    1. Muhammad Hanif & Kiran Zafar, 2020. "Developments in Islamic Finance Literature: Evidence from Specialized Journals التطورات في أدبيات التمويل الإسلامي: أدلة من دوريات متخصصة," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 33(2), pages 3-23, July.
    2. Mehmet Asutay & Yumeng Wang & Alija Avdukic, 2022. "Examining the Performance of Islamic and Conventional Stock Indices: A Comparative Analysis," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 29(2), pages 327-355, June.

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    More about this item

    Keywords

    Islamic stock indices; screening; compliance strategies; MASI.;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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