Shariah Screening methodologies: SAC-SC vs DJIM Comparative study and impact assessment on their performance

Mohamed Yassine Khouildi, Mohamed Bengana, Mounir Rakibi, Mohamed Redouane Riad, Suhaib Aldirchawi

Abstract


Purpose – The purpose of this paper is to compare between two screening methodologies in terms of applied methods and the impact assessment. Other than this the paper measures the performance of screened stocks in terms of risk & return and compare it to the conventional ones

Design/methodology/approach – The methods used are a combination of archival and bibliographic research based on some previously published articles. Also the papers use secondary data from published reports.

Findings – The paper identifies the impact assessment of the screening methodologies and how investors will not sacrifice part of their returns in order to achieve their moral and ethical values.

Originality/value – Many studies compared the two screening indices in term of methodologies; however this paper investigates and uses a quantitative analysis on the impact and performance of the screening methodologies. Furthermore it compares the stages of screening between Shariah Advisory Council of Securities commission (SAC-SC) and Dow Jones Islamic Market Index (DJIM)

Keywords screening, methodologies, impact assessment

Paper type comparative case study

Keywords


creening, methodologies, impact assessment

Full Text:

PDF

References


DJIM, S. D. (2017). S&P Shariah Indices methodology. S&P global.

Donia, M., & Marzban, S. (2008, november 1). Identifying Shariah-Compliant Equities a Challenging Task, Global. Retrieved october 16, 2017, from Global islamic finance: http://www.global-islamic-finance.com/2008/11/identifying-shariah-compliant-equities.html

Dow Jones Islamic Market IndexesSM. (2007, february ). Retrieved from http://islamthreat.com.

farooq, M. O., & Reza, M. H. (2014). Dow Jones Islamic Market US index - Applying technical analysis from a comparative perspective-. International Journal of Islamic and Middle Eastern Finance and Management, Vol. 7 Issue: 4 , 395-420.

Hassan, K., & Mahlknecht, M. (2011). Islamic Capital Market. Wiley Finance.

Hussein, K. (2007). Islamic investment: evidence from Dow Jones and FTSE indices. Islamic research and training institute .

Hussin, M. Y., & Borhan, J. T. (2009). Analisis Perkembangan Bursa Malaysia dan Pasaran Saham Islam di Malaysia. Shariah Journal, Vol. 17, No.3 , 431-456.

ISRA, I. S. (2015). Islamic Capital Markes practices & Principles. Kuala Lumpur: Securities Commission Malaysia.

Kasi, U., & Muhammad, D. J. (2016). Strict and Uniform Shariah Screening Methodologies in Selected Asian Countries in Comparison with the United States. Asian Journal of Finance & Accounting. ISSN 1946-052X Vol. 8, No. 1 , 38 - 76.

Moran, D. E. (1999). The Role of the Dow Jones Islamic Market Index in Islamic Finance. Center for Middle Eastern Studies, Harvard University , 257-258.

Nainggolan, Yunieta, How, J., & verhoeven, P. (2013, June 12-14). The cost of being ethical : evidence from Islamic equity funds. . Vermaelen, Theo & Wolff, Christian (Eds.) Financial Management Association European Conference, .

Najib, N. H., Hamid, I. R., Nasrudin, S. N., & Saiti, B. (2014). THE COMPARISON OF SHARIAH SCREENING METHODOLOGY FOR STOCKS BETWEEN MALAYSIA SECURITY COMMISSION CRITERIA AND DOW JONES METHOD: A CRITICAL ASSESSMENT. Research gate , 1-12.

NUR HAMIZAH BINTI NAJIB, I. R. (n.d.). THE COMPARISON OF SHARIAH SCREENING METHODOLOGY FOR STOCKS BETWEEN MALAYSIA SECURITY COMMISSION CRITERIA AND DOW JONES METHOD: A CRITICAL ASSESSMENT.

SAC-SC, S. a. (2013, may). Securities Commission Malaysia. Retrieved october 18, 2017, from List of Shariah-compliant Securities by the Shariah List of Shariah-compliant Securities by the Shariah: https://www.sc.com.my/data-statistics/islamic-capital-market/list-of-shariah-compliant-securities-by-scs-shariah-advisory-council/

SAC-SC, S. C. (2006). Resolutions of the Securities Commission Shariah Advisory Council Second Edition. kuala lumpur: Securities commission.

SC. (May 2013). List of Shariah-compliant Securities by the Shariah Advisory Council of the Securities Commission Malaysia. Securities commission , 1-40.

SC, S. C. (2017). ISLAMIC FUND AND WEALTH MANAGEMENT BLUEPRINT. Kuala Lumpur: Securities Commission Malaysia .

SC, S. C. (2012). Malaysia to Revise Screening Methodology Determining Shariah-compliant Status of Listed Companies. Securities Commission , 1.

Zainudin, N. B., Miskam, S. B., & Sulaiman, M. B. (2014). REVISED SHARIAH SCREENING METHODOLOGY FOR SHARIAH-COMPLIANT SECURITIES: NEW STANDARD TO MEET GLOBAL EXPECTATION. research gate , 76-85.

Al-khazali, O., Hooi, H., & Samet, A. (2014). Do Islamic stock indexes outperform conventional stock indexes ? A stochastic dominance approach. Pacific-Basin Finance Journal, 28, 29–46. https://doi.org/10.1016/j.pacfin.2013.09.003

Albaity, M., & Ahmad, R. (2008). PERFORMANCE OF SYARIAH AND COMPOSITE INDICES : EVIDENCE FROM BURSA MALAYSIA, 4(1), 23–43.

Bursa Malaysia. (n.d.). Retrieved October 23, 2017, from http://www.ftse.com/products/indices/bursa-malaysia

Dow Jones Islamic Market Islamic Market World Index - S&P Dow Jones Islamic Market Indices. (n.d.). Retrieved October 23, 2017, from https://us.spindices.com/indices/equity/dow-jones-islamic-market-world-index

Group, F. (2017). FTSE Factsheet, (September), 2016–2017.

Mohd Safwan Afiq Mohd Nasir. (2016). Performance Analysis between Shariah- compliant and Conventional Indices in US and Malaysia and their long-term relationships, (June), 0–52. https://doi.org/10.13140/RG.2.1.3104.9848

Sheila, N,N,H. Abedeen ,Z & Syed ,A,S.(2013). Towards Standardization of Shari’ah Screening Norms and Practices. International Journal of Humanities and Social Science Invention ISSN (Online): 2319 – 7722, ISSN (Print): 2319 – 7714.

Kassim, N. S., Ramlee, R., & Kassim, S. (2017). IMPACT OF INCLUSION INTO AND EXCLUSION FROM THE SHARIAH INDEX ON A STOCK PRICE AND TRADING VOLUME: AN EVENT STUDY APPROACH. INTERNATIONAL JOURNAL OF ECONOMICS AND FINANCIAL ISSUES. Vol 7 No. 2 .

Zainal, W. A., Kasim, N., Zakaria, N. B., & Mohamed, N. (2016, december 23). Disputes and resemblance:Comparative analysis of ShariahAdvisory Committee methodology ANDINTERNATIONAL INDI. malaysian accounting review, volume 15 no. 2 , pp. 1-10.




DOI: https://doi.org/10.14421/grieb.2017.052-01

Refbacks

  • There are currently no refbacks.




Copyright (c) 2017 Mohamed Yassine Khouildi, Mohamed Bengana, Mounir Rakibi, Mohamed Redouane Riad, Suhaib Aldirchawi

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

 

Global Review of Islamic Economics and Business

ISSN: 2338-2619 (p); 2338-7920 (e)

Published by:
Faculty of Islamic Economics and Business
State Islamic University (UIN) Sunan Kalijaga

In cooperation with:
Consortium for Islamic Economics

Creative Commons License
All publications by Global Review of Islamic
Economics and Business are licensed under a 
Creative Commons Attribution-ShareAlike 4.0
International License

 

Indexed by: 

SINTAGarudaGoogle ScholarNelitiMorarefIndonesia One SearchOCLC WorldCatBase