From Screening to Compliance Strategies: The Case of Islamic Stock Indices with Application on “MASI”

Ali Kafou () and Ahmed Chakir
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Ali Kafou: National School of Trade and Management, Agadir, Morocco
Ahmed Chakir: National School of Trade and Management, Agadir, Morocco

Islamic Economic Studies, 2017, vol. 25, 55-84

Abstract: The aim of this paper is to study the screening methodologies, as practiced by the mainstream Islamic stock market indices (ISI), through their application on the Moroccan All Shares Index (MASI). Thus, the possibility of providing the Casablanca stock exchange with its own Sharī‘ah-compliant stock index will be studied. First, the specific processing to construct ISI will be explained. Then, the screening is performed based on the methodological rules set by the mainstream ISI. The use of screens, as recommended by these indices’ Sharī‘ah committees, leads to different decisions about rejection or acceptance of stocks in the constructed index. This leads, in turn, to a plurality of ISI even when created using the same starting investable universe. Finally, compliance strategies were presented and applied to the MASI.

Keywords: Islamic stock indices; screening; compliance strategies; MASI. (search for similar items in EconPapers)
JEL-codes: G11 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (2)

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