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Adam Akademi, Sosyal Bilimler Dergisi
Article . 2024 . Peer-reviewed
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Understanding the Screening Criteria for Shariah-Compliant Stocks

Authors: Idris Babatunde Adeyemi; Ömer Faruk Tekdoğan;

Understanding the Screening Criteria for Shariah-Compliant Stocks

Abstract

Islamic finance operates as an alternative system meeting the investment requirements of individuals adhering to Islamic beliefs. While conventional finance prioritizes stock exchanges facilitating small-scale investments, challenges arise for Muslims investing their savings in stocks due to potential conflicts between companies' activities and revenues and religious principles. This situation prompts Islamic scholars to deliberate on the permissibility of purchasing specific company stocks. Various scholars and Shariah boards have established precise criteria for determining the permissibility of buying a company's stocks, leading to the development of indexes aimed at identifying compliant companies. Shariah-compliant stocks or companies adhere to the principles of Shariah law, governing various life aspects, including financial and economic activities. This study investigates Shariah screening methods, exploring their rationale, foundations, and potential religious influences, particularly focusing on six prominent Islamic indices. The study investigates Shariah's justifications and motives behind these methods, discussing their evaluation through different standards. Despite scholars' varying opinions and evolving methodologies, the primary objective remains consistent: to facilitate halal income for Muslim investors while maintaining Islamic ethical principles in financial practices.

Keywords

Islamic Finance;Screening Methods;Shariah-compliant Stocks;Islamic Indices, İslam Finansı, Islamic Finance, İslami Finans;İzleme Yöntemleri;Şer’i Uyumlu Hisse Senetleri;İslami Endeksler

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
2
Top 10%
Average
Average
gold