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Shariah-compliant equities and Shariah screening: need for convergence of ethical screening of stocks with Shariah screening

Tauhidul Islam Tanin (Monash Business School, Monash University, Melbourne, Australia)
Abu Umar Faruq Ahmad (Islamic Economics Institute, King Abdulaziz University, Jeddah, Saudi Arabia)
Aishath Muneeza (School of Graduate and Professional Studies, International Centre for Education in Islamic Finance, Kuala Lumpur, Malaysia)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 6 May 2021

226

Abstract

Purpose

This study explores the practical application of the Shariah screening process and how it could be enhanced by converging the same with the ethical screening of stocks.

Design/methodology/approach

This study adopts a qualitative research methodology by combining the qualitative descriptive approach and content analysis.

Findings

The findings of this research suggest that there is scope to converge ethical screening of stocks with Shariah Screening as the lex loci applicable to Shariah screening is derived from Shariah, which considers ethics as part of determining its rules.

Practical implications

The data from this study reveal several practical applications, the ultimate goal of which is to help the policymakers and stakeholders understand the relevance of the Shariah screening of stocks and get a streamlined screening process, paving the way to enhance the same using ethical screening criteria to develop its function to become much more relevant irrespective of the denomination of faiths.

Originality/value

This is original research, which is expected to contribute to understanding the extent to which Shariah screening can be enhanced by integrating the ethical stock screening dimension to it.

Keywords

Acknowledgements

Funding: This research has not received any specific grant from funding agencies in the public, commercial, or not-for-profit sectors.

We sincerely thank Professor Ilan Alon and Andrea Paltrinieri, the editors of the International Journal of Emerging Markets and three anonymous reviewers, for extraordinarily insightful and rewarding review comments. We also thank Mezbah Uddin Ahmed, Researcher, International Shari’ah Research Academy for Islamic Finance (ISRA), for his valuable comments.

Citation

Tanin, T.I., Ahmad, A.U.F. and Muneeza, A. (2021), "Shariah-compliant equities and Shariah screening: need for convergence of ethical screening of stocks with Shariah screening", International Journal of Emerging Markets, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/IJOEM-09-2020-1041

Publisher

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Emerald Publishing Limited

Copyright © 2021, Emerald Publishing Limited

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