Do We Need to Review our Starting ?
Towards a Gradual Methodology for
Sharia Stock Rating
Dr. Abdelhalim GHERBI
Department of Banking
College of Economics and Administrative Sciences
Al-Imam Muhammad Ibn Saud Islamic University, Riyadh, Saudi Arabia
Wednesday 03-01-2018 (14-04-1439H)
Researchers are used to distinguish between Sharia-compliant companies and non-compliant companies, then a number of terms has appeared such as “pure companies”,” mixed companies” and “illegal companies”; where it can’t be imagined that all the companies are on the same degree of Sharia Quality; So it looks needed to Sharia Stock Rating similar to Credit Ratings by the international rating agencies such as: Moody's, Standard & Poor's and Fitch...
Sharia Rating differs from Credit Rating that focuses on the company solvency and ability to fulfill its obligation. Sharia Rating is complement to the latter. While investors in financial markets check Credit Ratings to avoid the failed companies; Thus is the case with the Islamic stock market investors’ who prefer Top Sharia-compliant companies rated to avoid the lowest purity stock.
This study is to present an appropriate methodology for rating of Sharia–Compliant stocks.
Keywords: Credit Rating, International Rating Agencies, Sharia–Compliant Stocks, Sharia Stock Rating, Sharia Quality Rating, Pure Companies, Mixed Companies.