Shariah Guidelines for Trading and Investment in Stocks
In your quest for investing Islamicly, you might be at a place deciding which platform or app you should trust. To help you in your decision making, we present to you this article underpinning the importance of ‘research’ in assigning Shariah compliance status.
This will give you a wider understanding of the Shariah compliant equity space and why ISLAMICLY is different from other sources you may be accessing information from.
We earnestly hope that by reading this you will have a deeper understanding of what it takes to be a Shariah equity screening platform.
Was there a need for a Shariah-compliant equity app?
Although Shariah equity compliance criteria had started taking shape almost 20 years ago, there has been little take off in this space. There has been very little scope for participation from Shariah-conscious investors like you. To give you some sense of this, our research says more than $35 Trillion worth of listed stocks (by market cap) globally, will pass the Shariah equity screens, but just about $100 Billion is the market size of Shariah equity investments!
Some reasons for this were:
- Non-availability of credible Shariah compliance information for individual investors.
- Non-availability of financial institutions providing Shariah-compliant-equity-investment products in many jurisdictions due to unfavorable local laws.
- Very few credible Shariah equity investment advisory firms.
- High cost of Shariah compliant equity products created a drag on performance and discouraged investors to participate in this market segment.
- All of the above pitfalls were also accentuated by the lack of Shariah experts in this field.
To address these challenges, ISLAMICLY’s core team was formed 20 years ago comprising of Shariah scholars (having an understanding of Shariah as well as modern finance) and the executive research team having extensive experience in the same.
Team ISLAMICLY has the unique distinction of having worked directly with Shariah scholars, understanding the intricacies of Shariah and assigning credible Shariah compliance.
Islamicly’s research team has unmatched experience of providing Shariah equity screening information to a wide range of leading global financial institutions for almost 2 decades including the leading benchmark providers.
Hundreds of Shariah committee meetings, tens of thousands of hours of research in developing a world-class Shariah compliance research mechanism and a spending of millions of dollars amounted to not much for the masses directly! We feel that the ‘Shariah sensitive’ investor – YOU – had not been benefitting from such a vast knowledge base we acquired over these years.
The problem was of distribution of such information to Shariah adherent investors like you.
Enter Islamicly – an Islamic Fintech Revolutionising Halal Investing!
The growing acceptance of fintech products gave birth to ISLAMICLY in its current form. We seek to eliminate the distribution problem and bring unmatched Shariah compliant equity classification directly on to your phone and desktop.
This initiative will revolutionise the way Islamic finance and lifestyle products would be distributed in the years to come and unlocks a huge number of users like you. And you are now directly connected with the Shariah scholars through ISLAMICLY!
How is Islamicly Unique?
Scholars, Scholars, Scholars
Islamicly believes in honest execution and leaves the decision making to the scholars. All classification methodologies are Shariah-scholars backed. This is where the 100s of Shariah committee meetings time was spent!
Research, Research, Research
Islamicly is based on research. It’s this research which leads you to ask questions like why one company in grocery/retail is compliant while the other isn’t. Why some media platforms are compliant while the others aren’t. In-depth research is a fundamental principle at ISLAMICLY.
Ferociously Independent
Islamicly will always remain INDEPENDENT by being –
- 100% scholar-backed but not scholar-owned!
- Technology-aided but not technology-led.
- Information advisory and not Investment advisory .
AND ABOVE ALL
Transparent & Collaborative
We believe in knowledge sharing and information assimilating. We might at times make an error and would be humbled to be directed, so that the ISLAMICLY community benefits from this collaborative effort. We are building Islamicly as a Knowledge Sharing platform.
So what goes on behind the Islamicly App?
In simple words, Islamicly is an unmatched combination of Shariah scholars who are considered pioneers in the field of Islamic finance, a set of experts in modern finance and a research team that works directly under the guidance of the Shariah Scholars.
Our team has the distinction of working with Shariah scholars on some of the most prestigious Shariah boards globally. It is through these interactions that we developed an eye for unearthing Shariah sensitive information.
Islamicly’s research team has always been a trailblazer in setting benchmarks in Shariah screening. A lot of what was first identified, researched, debated and executed by Islamicly gets replicated across the industry.
An example of this would be the classification of companies like Mastercard Inc and Visa Inc. These companies are popularly believed to be promoting interest-based financial services. The fact is they aren’t, according to our research. This requires an understanding of modern finance and how payment networks function.
This leads us to the case in point that Shariah equity screening must be analyst backed and cannot be replicated with an algorithm! Hence, it requires research pedigree!
Current industry issues ISLAMICLY is navigating for you
Credibility
Islamicly is 100% Shariah scholars backed and will always be so.
Analysts backed not algorithm Based
Islamicly performs research through analysts, aided by technology. Even the most agile algorithm can throw funny results. A lot of screening information providers have adopted the algorithm route, which can result in an erroneous classification, like classifying an Islamic bank as non-compliant!
Wrong goal posts
As a user, you want to know if a stock is Shariah compliant or not. Rest is all gibberish. ISLAMICLY assigns a clean compliance status. Assigning an inconclusive status creates confusion.
The usage of multiple criteria (which gives an impression of the best of all worlds) isn’t a great approach either. It leaves the decision making to you and assumes no ownership!
Look forward to your support in making ISLAMICLY a benchmark for credible Shariah compliance information. Do subscribe to our Advanced APP and Desktop Platforms.
