Towards an islamic model of stock market

Abstract EN

The normative rules governing exchange in an Islamic stock market are discussed and the free enterprise capitalist model of stock market is evaluated from the Islamic and economic points of view.

Exchange of financial claims is found more vulnerable to hazard and to lack of information, both contrary to Islamic rules of exchange.

The efficiency criteria of capitalist stock markets are critically examined in the light of the theories of P.

Cootner, P.

A.

Samuelson and J.

M.

Keynes.

The dominance of speculative motives (vs.

that of real investment) and the nature of interaction among “professional” and “non-professional” market players deprive the capitalist stock market of internal stabilizers and undermine its efficiency.

Efficiency in the financial market cannot be ensured by leaving it free and ungoverned.

It is necessary to reinforce Islamic rules.

Some regulatory measures are indicated.