scholarly journals The Islamic Shariah Principles for Investment in Stock Market

2019 ◽  
Author(s):  
Md. Mahmudul Alam ◽  
Chowdhury Shahed Akbar ◽  
Shawon Muhammad Shahriar ◽  
Mohammad Monzur-E-Elahi
Keyword(s):  
Stock Market ◽  
Financial Crises ◽  
Islamic Law ◽  
Alternative Form ◽  
Current Form ◽  
The World ◽  
Failure To Protect

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.

scholarly journals The Islamic Shariah principles for investment in stock market

2017 ◽  
Vol 9 (2) ◽  
pp. 132-146 ◽  
Author(s):  
Md. Mahmudul Alam ◽  
Chowdhury Shahed Akbar ◽  
Shawon Muhammad Shahriar ◽  
Mohammad Monzur Elahi
Keyword(s):  
Stock Market ◽  
Mutual Funds ◽  
Financial Crises ◽  
Design Methodology ◽  
Islamic Law ◽  
Descriptive Study ◽  
Alternative Form ◽  
Current Form ◽  
Content Type ◽  
Failure To Protect

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.

scholarly journals Financial Crises In Spain: Lessons From The Last 150 Years

2012 ◽  
Vol 30 (3) ◽  
pp. 417-446 ◽  
Author(s):  
Concha Betrán ◽  
Pablo Martín-Aceña ◽  
María A. Pons
Keyword(s):  
Stock Market ◽  
Financial Crises ◽  
Financial Systems ◽  
The World ◽  
Different Types

AbstractFinancial crises are not unique to current financial systems. Are crises alike? Have they become more frequent, longer lasting and more severe since the 20thcentury? What does history tell us? The objective of this paper is to study the financial crises that have occurred in Spain over the last 150 years. We consider different types of crises (banking, currency and stock market crises), together with all their possible combinations, estimate their frequency by period and measure their length and depth. The main conclusion we obtain is that Spanish crises have been more frequent than in the rest of the world and have been more severe and more complex since 1973, as the 2007 crisis is confirming.

scholarly journals Sunshine after the rain? The stock market performance of family firms in and after financial crises

2021 ◽  
Vol 11 (3) ◽  
pp. 41-54
Author(s):  
Fabio Franzoi ◽  
Mark Mietzner
Keyword(s):  
Financial Crisis ◽  
Stock Market ◽  
Financial Crises ◽  
Family Firms ◽  
Market Performance ◽  
Economic Downturn ◽  
Euro Crisis ◽  
Exogenous Shock ◽  
Stock Market Performance ◽  
The World

This study applies financial crises as an exogenous shock to family and non-family firms to identify differences in stock market performance. We investigate 278 firms listed on the German Stock Exchange in the world financial crisis starting in 2007 as well as the Euro crisis starting in 2010. Based on the methodology of Gompers, Ishii, and Metrick (2003), we form portfolios with and without family blockholders and apply equally- as well as value-weighted four-factor models to identify differences in stock market performance. Results show that family firms do not necessarily perform better than non-family firms in years of economic downturn. But our models suggest that they outperform non-family firms three years after the beginning of the world financial crisis and in and after the Euro crisis. This implies that family firms recover faster than their non-family counterparts. We follow that the financial preconditions of family firms, differing financial strategies during recessions and the controlling incentives and capacities that are rooted in the long-term orientation and risk aversion of family blockholders, as well as the country-specific corporate governance framework of Germany, explain these differences. The paper contributes to the ongoing academic exploration on family firm performance as well as crisis resilience of family firms and suggests practical implications for policymakers in countries with high levels of family ownership among firms

scholarly journals Debt Management with a Conscience

ICR Journal ◽  
2010 ◽  
Vol 1 (4) ◽  
pp. 697-699
Author(s):  
Mohammad Hashim Kamali
Keyword(s):  
Stock Market ◽  
Financial Crises ◽  
Debt Management ◽  
Islamic Finance ◽  
Asset Bubbles ◽  
Fiat Money ◽  
The Us ◽  
The World ◽  
Stability And Resilience ◽  
Risk Element

The inner stability and resilience of Islamic finance will not hold, and the low risk element therein is bound to diminish unless the shari'ah principles are diligently observed. The world experienced two major financial crises within a decade: the currency and stock market crises of 1997-98, and now a crippling recession that began with the US subprime debacle caused by excessive lending to borrowers unable to make repayment. Both originated in ‘asset bubbles’ and unlimited creation of fiat money that loaded the market with the sale of debts, or bay' al-dayn, as it is known in the jargon of shari'ah law. Dealing in debts that lacked any asset base overwhelmed the financial system.

Basel Capital Adequacy Ratio Standard in The Light of Islamic Law Perspective

2016 ◽  
Vol 1 ◽  
pp. 308-317
Author(s):  
Adi Rahmanur Ibnu
Keyword(s):  
Financial Crises ◽  
Global Economy ◽  
Banking Sector ◽  
Islamic Law ◽  
Capital Requirements ◽  
Capital Adequacy ◽  
Minimum Capital ◽  
Capital Adequacy Ratio ◽  
Global Banking ◽  
Banking Development

Bank is one of the most important pillars of economy activities. However, banking sector has a real potential crisis threat. Alongside with the steady current global banking development, financial crises that have happened clearly affected global economy. Based on that situation, BIS (Bank for International Settlement) – an international financial standard setting organization, realizes the urgency to establishan international financial standard and supervision to anticipate future potential financial crises. This research aims to identify how Capital Adequacy Ratio Standard in Basel Capital Accord (II) based on Islamic law perspective. The research is conducted by analyzing Basel Capital Accord published by BIS. The research uses library research method to find out the aimed result. The focus is on the 1st pillar of Basel II publication that is Minimum Capital Requirements (CAR) policy. CAR, as an Islamic economics policy, will be analyzed using falāḥ approach. Falāḥ is an Islamic economics objective that consists of happiness, success, accomplishment or good luck concept. The earthly dimension of falāḥ has some parameters that can be used to analyze Islamic economics policy. Additionally, the Islamic fiqh maxim takes part in analyzing the policy. The maṣlaḥat concept in fiqh maxim approach shares aim with falāḥ concept in the sense that all of sharia law aims for success, happiness, eternal survival etc. The maṣlaḥat can be accomplished by extinguishing mafsadat or seizing maṣlaḥat. The maṣlaḥat aspect is essential to determine the compatibility Basel Capital Accord with jurisprudential maxim i.e harm must be dispelled (al-dharāru yuzāl). The conclusion results are, 1) Basel Capital Accord focuses on macro-prudential aspect in order to anticipate potential financial crises, 2) beneficial/interest (maṣlaḥat) aspects of the hereafter, cooperation principle, justice, fairness and the prohibition of exploitation are not the core value of Basel Capital Accord frame work, thus 3) the achievement of maslahat as intended by sharia i.e. jurisprudential maxim are not convincing. Therefore, 4) Basel Capital Accord as a regulation basis is not in line with jurisprudential maxim i.e harm must be dispelled (al-dharāru yuzāl).

Menakar Urgensi dan Masa Depan Legislasi Fiqih Produk Halal di Indonesia

2020 ◽  
Vol 14 (2) ◽  
pp. 177-190
Author(s):  
Siti Rohmah ◽  
Ilham Tohari ◽  
Moh. Anas Kholish
Keyword(s):  
Islamic Law ◽  
World Market ◽  
Legal Certainty ◽  
Muslim Countries ◽  
The World ◽  
Constitutional Protections

This article aims to identify and analyze the urgency and future of fiqh legislation for halal products in Indonesia. In addition, this article also aims to identify and analyze whether Law no. 33 of 2014 concerning the Guarantee of Halal Products is the result of authoritarianism in the name of Islamic law in Indonesia or is a constitutional guarantee for the majority of Muslims. The conclusion of this study shows that the effort to enact the jurisprudence of halal products through the Halal Product Guarantee Law is a constitutional necessity for Indonesian citizens who are predominantly Muslim. The regulation of halal certification in the Halal Product Guarantee Law is a form of legal certainty and constitutional protections for the majority of Muslims as consumers in Indonesia. In addition, the existence of the Halal Product Guarantee Law is also considered to provide benefits economically, socially, and healthily, which applies universally regardless of religion. Even the accusation that the Halal Product Guarantee Law is a product of authoritarianism that harms non-Muslims cannot be justified. Because the producers of food and medicine that are widely circulating in supermarkets and mini-markets in Indonesia are actually non-Muslim owners. Even with this halal certification, their products can enter the world market, especially in Muslim countries.

The Values and Norms of Islam

2010 ◽  
Vol 1 (1) ◽  
pp. 1-19
Author(s):  
Ahmed Akgunduz
Keyword(s):  
Islamic Law ◽  
Legal Theory ◽  
The Other ◽  
Moral Norms ◽  
Simple Fact ◽  
Value System ◽  
Legal Norms ◽  
Islamic Legal Theory ◽  
The World ◽  
Over Time

AbstractIslamic Law is one of the broadest and most comprehensive systems of legislation in the world. It was applied, through various schools of thought, from one end of the Muslim world to the other. It also had a great impact on other nations and cultures. We will focus in this article on values and norms in Islamic law. The value system of Islam is immutable and does not tolerate change over time for the simple fact that human nature does not change. The basic values and needs (which can be called maṣlaḥa) are classified hierarchically into three levels: (1) necessities (Ḍarūriyyāt), (2) convenience (Ḥājiyyāt), and (3) refinements (Kamāliyyāt=Taḥsīniyyāt). In Islamic legal theory (Uṣūl al‐fiqh) the general aim of legislation is to realize values through protecting and guaranteeing their necessities (al-Ḍarūriyyāt) as well as stressing their importance (al‐ Ḥājiyyāt) and their refinements (taḥsīniyyāt).In the second part of this article we will draw attention to Islamic norms. Islam has paid great attention to norms that protect basic values. We cannot explain all the Islamic norms that relate to basic values, but we will classify them categorically. We will focus on four kinds of norms: 1) norms (rules) concerned with belief (I’tiqādiyyāt), 2) norms (rules) concerned with law (ʿAmaliyyāt); 3) general legal norms (Qawā‘id al‐ Kulliyya al‐Fiqhiyya); 4) norms (rules) concerned with ethics (Wijdāniyyāt = Aḵlāqiyyāt = Ādāb = social and moral norms).

Maxims

2019 ◽  
pp. 654-669
Author(s):  
Donald R. Davis
Keyword(s):  
Islamic Law ◽  
Legal Interpretation ◽  
Legal Practice ◽  
Moral Foundation ◽  
Legal Principles ◽  
Legal Traditions ◽  
The World ◽  
The Law

This chapter examines the history and use of maxims in legal traditions from several areas of the world. A comparison of legal maxims in Roman, Hindu, Jewish, and Islamic law shows that maxims function both as a basic tools for legal interpretation and as distillations of substantive legal principles applicable to many cases. Maxims are characterized by their unquestionable character, even though it is often easy to demonstrate contradictions between them. As a result, legal maxims seem linked to the recurrent desire for law to have a moral foundation. Although maxims have lost their purchase in most contemporary jurisprudence and legal practice, categories such as “canons of construction,” “legal principles,” and “super precedents” all show similarities to the brief and limited collections of maxims in older legal traditions. The search for core ideas underlying the law thus continues under different names.

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