COMMON STOCKS AND EQUITY MARKETS

Obiyathulla Ismath Bacha, Ali Zhang Hengchao and Mirzet Šeho

Chapter 8 in Islamic Capital Markets:A Comparative Approach, 2025, pp 211-241 from World Scientific Publishing Co. Pte. Ltd.

Abstract: This chapter is designed to provide readers with an in-depth introduction to common stocks, their evolution, valuation, and pricing models. Beginning with an explanation of how equity differs from debt, the function of stock markets and the terminologies used are explained. The benefits of listing on stock markets are examined. The different schools of thought on stock price behavior are also discussed. On completing the unit, the reader should have a good understanding of stocks, why companies choose to list and issue stocks, what returns investors get from holding stocks, how to value stocks, and, finally, the alternative explanations of stock price behavior.

Keywords: Islamic Banking; Islamic Finance; Capital; Capital Markets; Contracts; Instrument Design; Interbank; Interbank Money Market; Islamic Interbank Money Market; Bond; Bond Market; Sukuk; Sukuk Market; Common Stocks; Equity Markets; Islamic Equities Market; Derivative Instruments; Shariah; Shariah-compliant Derivative Instrument; Exchange Rates; Foreign Exchange Market; Digital Financial Assets; Blockchain; Financial Solution; Digital Financial Solution; Conventional Capital Market; Dual Market (search for similar items in EconPapers)
JEL-codes: F3 G15 G18 G23 G24 (search for similar items in EconPapers)
Date: 2025
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