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The Islamic Shariah Principles for Investment in Stock Market

Author

Listed:
  • Alam, Md. Mahmudul

    (Universiti Utara Malaysia)

  • Akbar, Chowdhury Shahed
  • Shahriar, Shawon Muhammad
  • Monzur-E-Elahi, Mohammad

Abstract

Due to chronic financial crises experienced during last 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 due to unsatisfying several provisions from the Islamic law, known as shariah. This study provides the criteria under which conditions the Islamic shariah permits 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.

Suggested Citation

  • Alam, Md. Mahmudul & Akbar, Chowdhury Shahed & Shahriar, Shawon Muhammad & Monzur-E-Elahi, Mohammad, 2019. "The Islamic Shariah Principles for Investment in Stock Market," SocArXiv b7j4e, Center for Open Science.
    • Handle: RePEc:osf:socarx:b7j4e
    DOI: 10.31219/osf.io/b7j4e
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    1. Asyraf Wajdi Dusuki & Abdelazeem Abozaid, 2008. "Fiqh Issues in Short Selling as Implemented in the Islamic Capital Market in Malaysia قضايا فقهية فيما يتعلق بالبيع القصيركما هو مطبق في سوق المال الإسلامي بماليزيا," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 21(2), pages 63-78, July.
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    Cited by:

    1. 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.
    2. 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).
    3. 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.
    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.

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    More about this item

    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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