Language
English
English
Degree
M.Sc
Select type of work
CIS Program Old
CIS publications
No
CIS Thesis
Yes
Student Name
Umaima, Amtul Muqeet
Year of Graduation
2016
CIS Library Call Number
Thesis QFIS IF 2016/4
QF Thematic Areas
CIS Program
Abstract
| There are varied number of inconsistencies in the shariah screening methodologies that are being applied across different indices. These differences appear in the permissible levels of non-shariah compliant income and the tolerance threshold for various ratios that come under the quantitative screening such as the debt screen, liquidity screen and so on. The current screening methodologies have narrowed down their focus to the screening of the listed companies alone and hence other important macro elements such as the aspect of speculation and the levels of debt employed have not been considered, that were a major reason behind the debt crisis of 2008. Moreover, the current criteria have provided a single screening model to be applied to all countries regardless of their situation (for instance, whether it is a developed or emerging country, Muslim majority, or non-majority country). Therefore, this paper not only aims to highlight the inconsistencies in the current screening methodologies but also attempts to provide an alternative standardized screening methodology that is consistent with not only the shariah but also the finance perspective by differentiating between the Muslim majority and non- majority countries. In order to strengthen this study, the methodology that has been employed is the CAPM and ratios such as liquidity turnover (of stocks), price to earnings and so on have been proposed that aims to minimize investment in highly speculative and risky stocks in order to bring about stability in the economy. |
CIS Research Foci