Risk Management in Islamic Finance: An Analysis of by Muhammad Al-Bashir Muhammad Al-Amine

By Muhammad Al-Bashir Muhammad Al-Amine

This examine addresses derivatives tools in Islamic finance. It highlights some great benefits of those tools, their criminal facets and the right possible choices. The ahead, futures and innovations contracts in commodity markets are mentioned and the arguments in favour of and opposed to those tools tested. The ahead contracts factor comprises the potential of buying and selling gold in ahead foundation, the ahead marketplace for currencies and the potential replacement to regulate similar hazards. With the exam of futures contracts, the most arguments opposed to this sort of agreement are addressed, for instance the sale ahead of taking ownership and the sale of debt hedging and hypothesis. This learn proposes khiyar al-shart and bay al-arbun as instruments of chance administration and possible choices to ideas. The sale of natural rights is on the middle of the admissibility of thoughts in Islamic legislations and is investigated comprehensively.

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528. ” Regarding bayʿ al-kāliʾ bi al-kāliʾ, he concluded that there is no definitive statement in the sunnah of its prohibition, the Qurʾān’s ʾāyat al-Mudāyanah validated deferred sales, and the manifest texts seem to accommodate an affirmative ruling on futures trading. 26 We would like to make a brief comment here regarding Majd al-Dīn ʿAzzām’s methodology that is not addressed by Kamālī’s work. Although Majd al-Dīn’s conclusion is correct, part of his methodology might not be acceptable. He maintained that the norm concerning mu’amalāt or Islamic commercial transactions is permissibility, which means that contracts are generally permissible unless they are clearly prohibited by the texts (nuṣūṣ).

Thus, there is a need for establishing an exchange as a central place where buyers and sellers meet 27 See Bayt al-Tamwīl al-Kuwaitī, al-Fatāwā al-Sharʿiyyah fi al-Masāʾil al-ʾIqtiṣādiyyah, al-Kuwait, 1985, pp. 527–545. 28 Fahīm Khān, Islamic Futures and their Markets with Special Reference to Their Role in Rural Financial Market, Islamic Research and Training Institute, Islamic Development Bank, Jeddah, Saudi Arabia, 1995. 29 Ibid. introduction, literature review 29 to undertake transactions.

Salmon calls for a total exclusion of options contracts because they bring additional uncertainty and they are not comparable to bayʿ alsalam. He rejected the possibility of taking a fee for a premium or option without any discussion. However, it seems that there are no grounds for comparison between the two contracts. On the other hand, his criticisms of short-selling and margin sale deserve consideration. Furthermore, Aḥmad El-Ashkar in his article, “Towards an Islamic Stock Exchange in a Transitional Stage,” observed that speculation could hardly be viewed as a game of chance or be equated with gambling.

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