Principles of Islamic banking and finance/PIBF203/Investment in stocks/Video signpost
In this video, Dr. Shamim Siddiqui from Hamdan Bin Mohamed Smart University, provides an overview of investment in stocks from an Islamic perspective
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Video transcript
It is claimed that the concept of stock market was first introduced in France in the thirteenth century. However, as you already know, the musharakah and mudarabah modes of finance have the basic elements of what is involved in trading of stocks of a modern company. Notwithstanding the fact that Muslims are among the pioneer of profit and loss sharing investments, the current form of stock market restricts the devout among them from seeking economic bounties from it due to some practices that goes against Islamic law. As a consequence, in spite of religious encouragement for Muslims to seek economic opportunities, they cannot engage wholeheartedly in the trading of conventional stock markets. Moreover, stock markets that follow the Islamic principles are still in early stages of development. Most of the stock exchanges in Muslim countries are basically western-style markets which tolerate many practices that do not comply with Islamic principles. Moreover, only a handful of stock markets across the globe -- such as Khartoum Stock Exchange (KSE) in Sudan, Kuala Lumpur Stock Exchange (KLSE) in Malaysia and Tehran Stock Exchange (TSE) in Iran, for example -- accommodate for the Islamic Laws of trading in the stock market. In this session, we will learn about the problematic aspects of conventional practices in the trading of stocks and how Islamic scholars have dealt with these problems.
