Design, qualification and Shariah governance of stock screening methodologies in selected Gulf Cooperation Council (GCC) countries in comparison with the United States

• Main Authors: Kasi, Umayal, Muhammad, Junaina
• Format: Article
• Language: English
• Published: Emerald Publishing 2018
• Online Access: http://psasir.upm.edu.my/id/eprint/72195/1/Design%2C%20qualification%20and%20Shariah%20.pdf; http://psasir.upm.edu.my/id/eprint/72195/; https://www.emerald.com/insight/content/doi/10.1108/QRFM-04-2017-0039/full/html
• Institution: Universiti Putra Malaysia

Purpose This paper aims to compare and analyse the aspects of Shariah screening methodologies within the selected Gulf Cooperation Council (GCC) countries as well as comparing the methodologies with the USA, and to examine how Shariah screening methodologies affect financing and investing activities of a firm. Design/methodology/approach Shariah screening methodologies within the selected GCC countries and between the GCC countries and the USA are compared on the basis of the data collected from secondary sources. Findings Design, qualification and Shariah governance set the Shariah screening methodologies within the GCC countries apart. Feasibility, duration, economic viability and funds required differentiate these Shariah screening methodologies between the GCC countries and the USA. Shariah screening methodologies implied in the USA is more stringent than in the GCC countries. Research limitations/implications The suggestions in this study include using a longer research timeline, examining many more number of countries’ Shariah screening methodologies and exploring other types of Shariah screening methodologies. Practical implications The possibility of generalising the implementation of strict and uniform Shariah screening methodologies across all the country-specific Shariah indices amongst Muslim nations, globally, is likely to benefit all the Muslim countries, by strengthening the understanding, interaction and economic co-operation amongst these countries. Social implications People’s needs can be tended to if Maqasid Al-Shariah (objectives of Shariah) is achieved through flexibility, dynamism and creativity within the social policy. Originality/value Aspects of Shariah screening methodologies are compared and contrasted within the selected GCC countries as well as between the GCC countries and the United States and the role of Shariah screening methodologies is examined in order to determine the extent of what is Shariah-Compliant and what is Non-Shariah Compliant for a firm.