The Concept of Hedging in Islamic Financial Transactions

Ahmad, Azlin Alisa; Halim, Mustafa Afifi Ab.

doi:10.5539/ass.v10n8p42

Cited by 8 publications

(2 citation statements)

References 5 publications

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“…It may boost public trust in Islamic money transfers, deals, and activities. One of the key focuses of a Financial Technologies study on Islamic banking is determining if the agent is operating in the best interests of all interested parties (Ahmad & Halim, 2014). Nonetheless, most countries that provide Islamic banking still do not recognise smart contracts legally or have any regulations governing them.…”

Section: Blockchain Technologies and Islamic Financementioning

confidence: 99%

Exploring the Nexus of Financial Technologies, Financial Inclusion, and Blockchain in Islamic Finance within Digital Transformation

Kanwal,

Tayyab,

Idrees

2023

Pak. J. Humanit. Soc. Sci

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Financial technology and continuous digital growth are having an influence on financial inclusion which has significant ramifications for the faith-based financial paradigm. The objective of this research is to investigate the relationships and effects of financial technologies in Islamic financing inside financial institutions within the framework of digital transformation and blockchain technology. The use of these advancements will significantly affect Sharia-compliant Islamic finance. This paper critically investigates the historical and current implications of Financial Technologies, financial inclusion, and Blockchain in Islamic Finance worldwide with a focus on banking, investing, and compliance with regulations. Using a comprehensive review of the literature, indexing journals, and empirical case studies, this research seeks to provide significant new insights on the development and status of several areas within the Islamic financial industry. In order to make Sharia compatible, it also examines how digitalization has altered the landscape. Furthermore, before they can considerably promote financial inclusion in many countries, the Islamic financial services industry and the junction of technology and Islamic finance still have a ways to go due to the scale necessary. The study's findings may serve as a guide for financial institutions, decision-makers, and other interested parties in order to maximise the potential of blockchain technology and other financial innovations in Islamic finance across a range of Islamic nations. Long-term, equitable economic growth will result from this.

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Section: Blockchain Technologies and Islamic Financementioning

confidence: 99%

Exploring the Nexus of Financial Technologies, Financial Inclusion, and Blockchain in Islamic Finance within Digital Transformation

Kanwal,

Tayyab,

Idrees

2023

Pak. J. Humanit. Soc. Sci

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“…This contract is used in conventional finance for the purpose of hedging and speculation. The objective of hedging is permissible in Islam, so how to achieve the objective of the hedge has been refined so that the uses of forward contracts are not open for speculators dominate the market by doing gambling on prices (Azlin, 2014). This implies the need to ensure that the contract is free from riba, gharar, speculation and maysir (gambling).…”

Section: Introductionmentioning

confidence: 99%

Contracting with Gharar (Uncertainty) in Forward Contract: What Does Islam Says?

Nordin

Aziz

Ahmad³

et al. 2014

ASS

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The forward contract is one of derivative instruments. The value of this contract is derived from the values of underlying assets such as commodities, equities, and currencies. Muslim scholars differ on the permissibility of forward contracts. Among the key issues raised in the forward contract is the issue of gharar. In general, gharar means an excessive uncertainty and risk. However, not all contracts containing the element of gharar void the contract. This article attempts to formulate a parameter for gharar that voids the contract based on the opinions of classical and current scholars. It also analyses the elements of gharar that exist in forward contracts of crude palm oil in Malaysia. This study uses a thematic analysis approach to explain the data collected through secondary sources and interviews with few individuals involved in this industry. Based on the analysis of forward contracts on the parameter of gharar, the finding of this research indicates that the issue of gharar exists in forward contracts does not void the contracts.

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Testing of The Gold’s Role as a Safe Haven and Hedge for Sharia Stocks in Indonesia

Robiyanto

2018

Al-Iqtishad: Jurnal Ilmu Ekonomi Syariah

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Gold as a commodity, since ancient time, is always viewed as a safe haven asset. This study tested the function of gold as a safe haven and hedge for sharia stocks in Indonesia. Data used in this study are a monthly closing of Jakarta Islamic Index (JII) on Indonesia Stock Exchange and monthly closing price of gold in the international market during May 2008 until September 2017. Data analysis was done by using OLS and QREG. The result of this study is gold can serve as a hedge for sharia stocks in Indonesia during the research period. The study further found that when extreme shocks occur in the Indonesian stock market, gold can serve as a safe haven asset for sharia stocks in Indonesia. Investor suggested shifting their assets into gold to secure their investment when stock market conditions experience a drastic decline. Abstrak. Emas sebagai komoditas, semenjak jaman dahulu kala selalu dipandang sebagai aset teraman. Penelitian ini secara khusus menguji fungsi emas sebagai aset teraman (safe haven) dan pelindung nilai (hedge) bagi saham-saham syariah di Indonesia. Data yang dipergunakan dalam penelitian ini adalah data Jakarta Islamic Index (JII) penutupan bulanan di Bursa Efek Indonesia dan data harga emas penutupan bulanan di pasar internasional selama periode bulan Mei 2008 hingga bulan September 2017. Analisis data dilakukan dengan mengguna kan OLS dan QREG. Hasil penelitian ini adalah emas dapat berfungsi sebagai pelindung nilai (hedge) bagi saham-saham syariah di Indonesia selama periode penelitian. Lebih lanjut penelitian ini menemukan bahwa ketika terjadi goncangan yang sangat ekstrim di pasar saham, maka emas dapat berfungsi menjadi aset teraman (safe haven) bagi saham-saham syariah di Indonesia. Investor disarankan untuk mengalihkan aset mereka dalam bentuk emas guna meng amankan investasinya ketike terjadi penurunan yang drastis di pasar modal. Kata kunci: emas, Jakarta Islamic index, regresi kuantil, aset teraman, lindung nilai.

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The Concept of Hedging in Islamic Financial Transactions

Cited by 8 publications

References 5 publications

Exploring the Nexus of Financial Technologies, Financial Inclusion, and Blockchain in Islamic Finance within Digital Transformation

Exploring the Nexus of Financial Technologies, Financial Inclusion, and Blockchain in Islamic Finance within Digital Transformation

Contracting with Gharar (Uncertainty) in Forward Contract: What Does Islam Says?

Testing of The Gold’s Role as a Safe Haven and Hedge for Sharia Stocks in Indonesia

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