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Reforms required for shariah screening of equities using the case study of Dow Jones Islamic Market Index (DJIMI)

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dc.contributor.authorRizwan Malik
dc.contributor.authorHumayon Dar
dc.contributor.authorAishath Muneeza
dc.date.accessioned2025-05-16T03:01:44Z
dc.date.available2025-05-16T03:01:44Z
dc.date.issued2025
dc.description.abstractPurpose There is no uniform methodology adopted worldwide for Shariah equity screening. The purpose of this research paper is to suggest reforms required to improve Shariah screening methodologies used for equities using Dow Jones Islamic Market Index, which is the world’s first such methodology adopted. Design/methodology/approach This research uses a qualitative research methodology that goes beyond analysing secondary data on the subject matter. It includes conducting semi-structured interviews with selected subject matter experts to gain insights into the practical issues associated with existing Shariah screening methodologies. The aim is to identify areas for potential reforms that can be implemented in the future. By combining secondary data analysis with first-hand perspectives from experts, this research provides a comprehensive understanding of the challenges and opportunities in Shariah screening, contributing to the development of practical and effective reforms. Findings The study recommends the inclusion of additional filters in Shariah screening methodologies to promote stocks that are not only Shariah-compliant but also socially responsible. It suggests that while a certain level of Shariah non-compliance threshold may be tolerated during the initial screening stage, over time, this accepted threshold should gradually decrease. The ultimate goal is to achieve 0% thresholds for Shariah-compliant equities. By advocating for stricter criteria and a progressive reduction in non-compliance tolerance, the study highlights the importance of continuously improving and refining Shariah screening practices to ensure higher levels of compliance and alignment with Shariah principles. Originality/value It is anticipated that the findings of this research provides original insights and contributions to existing knowledge. It offers novel perspectives, innovative approaches and solutions to address specific areas in need of reform. By focusing on enhancing the effectiveness and standardisation of Shariah-compliant investment practices, the research brings fresh perspectives and adds value to the field. Its unique contribution lies in identifying and addressing emerging challenges and proposing improvements in Shariah screening methodologies.
dc.identifier.citationMalik, R., Dar, H. and Muneeza, A. (2025), Reforms required for Shariah screening of equities using the case study of Dow Jones Islamic market index (DJIMI), International Journal of Law and Management, 67(3), 325-340. https://doi.org/10.1108/IJLMA-08-2023-0171
dc.identifier.doihttps://doi.org/10.1108/IJLMA-08-2023-0171
dc.identifier.issn1754-243X
dc.identifier.urihttps://ikr.inceif.edu.my/handle/INCEIF/4208
dc.language.isoen
dc.publisherEmerald Publishing Limited.
dc.subjectShariah
dc.subjectEthics
dc.subjectSocially responsible
dc.subjectIslamic finance
dc.subjectEquity
dc.subjectInvestment
dc.subjectStock screening
dc.subjectPerformance
dc.subjectDow Jones Islamic Market Index
dc.titleReforms required for shariah screening of equities using the case study of Dow Jones Islamic Market Index (DJIMI)
dc.typeArticle
dlc.maintopicIslamic finance
dspace.entity.typePublication
relation.isAuthorOfPublication81014255-5cb8-46bc-ad81-bf6d8a3a0702
relation.isAuthorOfPublication.latestForDiscovery81014255-5cb8-46bc-ad81-bf6d8a3a0702
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