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Shariah Investment Screening Criteria: A Critical Review المعايير الشرعية لفرز الاستثمارات: مراجعة نقدية

Author

Listed:
  • Saeed bin Mahfooz

    (Durham University, UK.)

  • Habib Ahmed

    (Sharjah Chair in Islamic Law & Finance at Durham University Business School, UK.)

Abstract

The primary objective of the study is to provide a comprehensive description of the contemporary Shariah investment screening process and its implication on the practices of managing mutual funds. This will be done by critically reviewing the application of such screening criteria, from both Shariah and practical perspectives, and providing some suggestions for improvement. In practice there appears to be inconsistencies in the Shariah investment screening criteria among Islamic investment institutions, as well as the changing of the Shariah rules over time. That shakes confidence in the application of Shariah screening criteria, which might adversely affect the Islamic mutual funds industry. The paper, therefore, attempts to identify such inconsistencies and proposes some practical solutions which may restore confidence in the investment screening process. الهدف الرئيسي من هذه الدراسة هو إعطاء وصف تحليلي شامل لمعايير الاستثمار الشرعية المعاصرة وتأثيرها العملي على إدارة الصناديق والمحافظ الاستثمارية، وذلك من خلال المراجعة النقدية لتطبيقات المعايير الشرعية من الناحيتين الشرعية والعملية مع إعطاء بعض المقترحات للتطوير والتحسين. من الناحية التطبيقية يظهر أن هنالك عدم تطابق في المعايير الشرعية المستخدمة من خلال المؤسسات المالية الإسلامية المختلفة، كما يظهر أن هنالك تغير في المعايير الشرعية بمرور الوقت، مما يهز ثقة المستثمرين في مصداقية تطبيقات معايير الاستثمار الشرعية والذي قد يؤثر سلباً في صناعة الصناديق الاستثمارية الإسلامية. لأجل ذلك تسعى الورقة العلمية للتعريف بالاختلافات في المعايير الشرعية المستخدمة مع اقتراح بعض الحلول العملية لاستعادة الثقة في صناديق الاستثمار الإسلامية. كما تدعو الورقة العلمية الهيئات الشرعية ليكون لها دور أكثر إيجابية وفاعلية من خلال التأثير على مدراء صناديق الاستثمار الإسلامية لتبني معايير ومبادئ المسؤولية الاجتماعية في عملية اختيار الاستثمارات لتكون متوافقة مع مقاصد ومبادئ الشريعة الإسلامية وأسوة بصناديق الاستثمار التقليدية ذات المسؤولية الاجتماعية.

Suggested Citation

  • Saeed bin Mahfooz & Habib Ahmed, 2014. "Shariah Investment Screening Criteria: A Critical Review المعايير الشرعية لفرز الاستثمارات: مراجعة نقدية," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 27(1), pages 3-38, January.
    • Handle: RePEc:abd:kauiea:v:27:y:2014:i:1:no:1:p:3-38
    DOI: 10.4197/Islec.27-1.1
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    References listed on IDEAS

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    1. Mohammed Obaidullah, 2005. "The Islamic Financial Services الخدمات المالية الإسلامية," Books published by the Islamic Economics Institute, KAAU., King Abdulaziz University, Islamic Economics Institute., edition 1, number 40, July.
    2. Derigs, Ulrich & Marzban, Shehab, 2009. "New strategies and a new paradigm for Shariah-compliant portfolio optimization," Journal of Banking & Finance, Elsevier, vol. 33(6), pages 1166-1176, June.
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    Cited by:

    1. Ahmed, Habib & Elsayed, Ahmed H., 2019. "Are Islamic and conventional capital markets decoupled? Evidence from stock and bonds/sukuk markets in Malaysia," The Quarterly Review of Economics and Finance, Elsevier, vol. 74(C), pages 56-66.
    2. Abdullah Muhammad Ahmed Ayedh & Muhammad Iqmal Hisham Kamaruddin & Amir Shaharuddin, 2019. "Challenging the Current Shariah Screening Methodology Assessments in Kuala Lumpur Shariah Index (KLSI)," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 9(4), pages 253-268, October.

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