IDEAS home Printed from https://ideas.repec.org/a/hur/ijarbs/v7y2017i8p602-614.html
   My bibliography  Save this article

Commodity Futures: A Maqasid Al-Shariah Based Analysis

Author

Listed:
  • Nadhirah Nordin
  • Mahadi Mohammad
  • Azlin Alisa Ahmad
  • Mohamad Sabri Haron
  • Normadiah Daud

Abstract

This paper aims to analyse Malaysian Crude Palm Oil futures (FCPO) in light of the maqasid alShariah. The Shariah Advisory Council of the Malaysian Securities Commission (SAC) resolves that FCPO is permissible as it is in accordance with Shariah principles. The maqasid al-Shariah is the objectives and wisdom (hikmah) as prescribed by the Shariah in all its rulings to preserve the benefits of, and prevent harm to, human wellbeing. It can be categorized into three broad categories, namely daruriyyah (necessity), hajiyyah (requirement) and tahsiniyyah (embellishments). The approaches used in this study are document analysis and interviews. This study found that FCPO does not fulfil the categories of daruriyyah (necessity) and hajiyyah in the maqasid al-Shariah. Thus, it is suggested that FCPO should promote maqasid al-Shariah in its holistic direction. The legality of a financial contract is judged from the contract (aqd) aspect and equally important is on its economic and social impacts to the society.

Suggested Citation

  • Nadhirah Nordin & Mahadi Mohammad & Azlin Alisa Ahmad & Mohamad Sabri Haron & Normadiah Daud, 2017. "Commodity Futures: A Maqasid Al-Shariah Based Analysis," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(8), pages 602-614, August.
    • Handle: RePEc:hur:ijarbs:v:7:y:2017:i:8:p:602-614
    as

    Download full text from publisher

    File URL: http://hrmars.com/hrmars_papers/Commodity_Futures_A_Maqasid_Al-Shariah_Based_Analysis.pdf
    Download Restriction: no
    File URL: http://hrmars.com/hrmars_papers/Commodity_Futures_A_Maqasid_Al-Shariah_Based_Analysis.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. M.Umer Chapra, 1988. "Towards An Islamic Financial System," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 1(2), pages 1-30, July.
    2. Bacha, Obiyathulla I., 1999. "Derivative Instruments and Islamic Finance: Some Thoughts for a Reconsideration," MPRA Paper 12752, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Khairil Faizal Khairi & Mohamad Subini Abdul Samat & Nur Hidayah Laili & Hisham Sabri & Mohd Yazis Ali Basah & Asmaddy Haris & Azrul Azlan Iskandar Mirza, 2020. "Takaful Protection for Mental Health Illness From the Perspective of Maqasid Shariah," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 11(3), pages 168-175, June.
    2. Romi Adetio Setiawan, 2022. "Issues in Islamic Derivatives and Proposals for Reforms in the OTC Market in Indonesia," JRFM, MDPI, vol. 15(5), pages 1-16, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andreas A. Jobst, 2014. "The Islamic debate on derivatives," Chapters, in: M. Kabir Hassan & Mervyn K. Lewis (ed.), Handbook on Islam and Economic Life, chapter 16, pages iii-iii, Edward Elgar Publishing.
    2. Ehab M. M. INJADAT, 2014. "Futures and Forwards Contracts from Perspective of Islamic Law," Journal of Economics and Political Economy, KSP Journals, vol. 1(2), pages 241-252, December.
    3. Bengana, Mohamed & Khouildi, Mohamed Yassine, 2018. "Options: From Conventional and Islamic perspectives Analyses on the Islamic solutions," MPRA Paper 84499, University Library of Munich, Germany.
    4. Ebrahim, M. Shahid & Rahman, Shafiqur, 2005. "On the pareto-optimality of futures contracts over Islamic forward contracts: implications for the emerging Muslim economies," Journal of Economic Behavior & Organization, Elsevier, vol. 56(2), pages 273-295, February.
    5. Nadhirah Nordin & Normadiah Daud & Mahadi Mohammad & Hashim Jusoh & Mohd Shukri Jusoh & Faizol Ismail, 2017. "Commodity Derivatives: Shariah Alternatives in Risk Management?," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 7(4), pages 232-246, April.
    6. Chapra, Muhammad Umer, 1996. "Monetary Management In An Islamic Economy," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 4, pages 2-35.
    7. Khan, Tariqullah, 2000. "Islamic Quasi Equity (Debt) Instruments And The Challenges Of Balance Sheet Hedging: An Exploratory Analysis," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 7, pages 1-31.
    8. Injadat, Ehab M. M., 2014. "Futures and Forwards Contracts from Perspective of Islamic Law," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 1(2), pages 241-252.
    9. Mr. Juan Sole & Andreas Jobst, 2012. "Operative Principles of Islamic Derivatives: Towards a Coherent Theory," IMF Working Papers 2012/063, International Monetary Fund.
    10. Bulut, Mehmet & Korkut, Cem, 2016. "A Comparison between Ottoman Cash Waqfs (CWs) and Participation Banks and Modern Interest-free Financial Institutions," MPRA Paper 76009, University Library of Munich, Germany, revised 10 Jan 2017.
    11. Mr. Juan Sole, 2007. "Introducing Islamic Banks into Conventional Banking Systems," IMF Working Papers 2007/175, International Monetary Fund.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hur:ijarbs:v:7:y:2017:i:8:p:602-614. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Hassan Danial Aslam (email available below). General contact details of provider: http://hrmars.com/index.php/pages/detail/IJARBSS .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.