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The IslamicShariahprinciples for investment in stock market

Author

Listed:
  • Md. Mahmudul Alam
  • Chowdhury Shahed Akbar
  • Shawon Muhammad Shahriar
  • Mohammad Monzur Elahi

Abstract

Purpose - Because 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 asShariah. This study aims to provide the criteria under which conditions of the IslamicShariahpermit making investments in the stock market. Hand in hand with that primary discussion, it has been eluded briefly why the IslamicShariahprinciples offer a better alternative against conventional practices of the stock market. Design/methodology/approach - This is a descriptive study based on the literature review. Findings - This study explores the basic Islamic principles of investment in the stock market by revisiting the norms laid down byShariahand current global practices of Islamic stock market and indexes. Originality/value - This study will work as a guideline for investors and market authorities to understand the originalShariahrulings and the benchmark rulings for investment or establishing full-fledged Islamic stock markets, indexes and mutual funds.

Suggested Citation

  • Md. Mahmudul Alam & Chowdhury Shahed Akbar & Shawon Muhammad Shahriar & Mohammad Monzur Elahi, 2017. "The IslamicShariahprinciples for investment in stock market," Qualitative Research in Financial Markets, Emerald Group Publishing Limited, vol. 9(2), pages 132-146, May.
    • Handle: RePEc:eme:qrfmpp:qrfm-09-2016-0029
    DOI: 10.1108/QRFM-09-2016-0029
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    Cited by:

    1. Ihsan Ali & JiaNing Liu & Sayed Kifayat Shah & Muhammad Sualeh khattak, 2025. "Islamic Practices and Investment Decision: The Role of Money Management Skills and Digital Financial Literacy," SAGE Open, , vol. 15(4), pages 21582440251, December.
    2. Mohammad Hariri, 2022. "Characterization of Islamic Investments Funds: A Systematic Literature Review," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(5), pages 1-14, May.
    3. Amel Farhat & Amal Hili, 2025. "The impact of Shariah compliance on firm's performance and risk," Review of Financial Economics, John Wiley & Sons, vol. 43(2), pages 231-257, April.
    4. Fatma Alahouel & Nadia Loukil, 2020. "Financial uncertainty valuation: doesShariahcompliant screening matter?," International Journal of Islamic and Middle Eastern Finance and Management, Emerald Group Publishing Limited, vol. 14(1), pages 57-76, August.
    5. Dwipraptono Agus Harjito & Md. Mahmudul Alam & Rani Ayu Kusuma Dewi, 2021. "Impacts of International Sports Events on the Stock Market: Evidence from the Announcement of the 18th Asian Games and 30th Southeast Asian Games," Post-Print hal-03538176, HAL.
    6. Aloui, Chaker & Asadov, Alam & Al-kayed, Lama & Hkiri, Besma & Danila, Nevi, 2022. "Impact of the COVID-19 outbreak and its related announcements on the Chinese conventional and Islamic stocks’ connectedness," The North American Journal of Economics and Finance, Elsevier, vol. 59(C).

    More about this item

    Keywords

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    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • P1 - Political Economy and Comparative Economic Systems - - Capitalist Economies
    • P47 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Performance and Prospects
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems

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