Islamic Financial Markets in Times of Global Uncertainty

A special issue of Journal of Risk and Financial Management (ISSN 1911-8074). This special issue belongs to the section "Financial Markets".

Deadline for manuscript submissions: 30 April 2026 | Viewed by 1939

Special Issue Editors


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Guest Editor
Department of Finance and Accounting, Rennes School of Business, 35065 Rennes, France
Interests: financial risk management; sustainable finance; Islamic finance; financial econometrics
Special Issues, Collections and Topics in MDPI journals

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Guest Editor
College of Business, Imam Mohammad Ibn Saud Islamic University (IMSIU), Riyadh P.O. Box 5701, Saudi Arabia
Interests: insurance; risk management; islamic market; sustainability; corporate governance

Special Issue Information

Dear Colleagues,

Global financial markets are experiencing heightened uncertainty due to geopolitical conflicts, climate risks, technological disruptions, and shifting monetary policies. These dynamics are reshaping investment flows, financial stability, and risk perceptions worldwide. In this context, Islamic financial markets, anchored in principles of risk-sharing, asset-backing, and ethical finance, offer an alternative framework that may enhance resilience and stability in turbulent times.

The study of Islamic finance under conditions of uncertainty is not only timely but also critical for both academics and practitioners. By exploring the performance, innovation, and governance of Islamic financial instruments, we can better understand their role in addressing global challenges while advancing sustainable and inclusive financial systems.

This Special Issue seeks to advance scholarly debates on whether Islamic finance offers distinct resilience mechanisms in times of uncertainty, and how innovations in Islamic financial markets can contribute to global financial stability, sustainability, and inclusion.

This Special Issue invites theoretical, empirical, and policy-oriented contributions on topics including, but not limited to, the following:

  • Islamic capital markets and geopolitical risk: Performance of sukuk and Islamic equity indices during conflicts, sanctions, and macroeconomic shocks.
  • Resilience and stability: Comparative evidence on Islamic vs. conventional financial markets in periods of volatility, crises, or pandemics.
  • Islamic Fintech and digital transformation: The role of blockchain, digital sukuk, and Shariah-compliant fintech in enhancing resilience and inclusion.
  • Green and socially responsible Islamic finance: Development of green sukuk, ESG-aligned Shariah screening, and contributions to sustainable development goals.
  • Corporate governance and Shariah compliance: The role of Shariah boards, ethical investment practices, and diversity in Islamic financial institutions.
  • Cross-border integration and regulation: Challenges and opportunities in harmonizing Islamic finance standards across jurisdictions amid global shocks.

Dr. Taoufik Bouraoui
Dr. Ines Belgacem
Guest Editors

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Keywords

  • Islamic finance resilience
  • geopolitical risk and sukuk
  • shariah-compliant investments
  • Islamic capital markets
  • financial stability and sustainability
  • Islamic fintech and digital transformation
  • green sukuk and ESG
  • risk sharing and ethical finance
  • corporate governance in Islamic finance
  • global financial integration and regulation

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Published Papers (1 paper)

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Research

19 pages, 484 KB  
Article
Which Islamic Index to Invest?
by Burak Doğan and Umut Ugurlu
J. Risk Financial Manag. 2025, 18(11), 651; https://doi.org/10.3390/jrfm18110651 - 19 Nov 2025
Viewed by 1543
Abstract
This paper compares the rulebooks of five main Shariah-compliant equity indices—DJIMI, KLSI, FTSE Shariah, MSCI Islamic, and STOXX Europe Islamic 50—inside one fixed S&P 500 stock list from Q1 2019 to Q4 2023. For each index, we build both equally weighted and market-capitalization-weighted [...] Read more.
This paper compares the rulebooks of five main Shariah-compliant equity indices—DJIMI, KLSI, FTSE Shariah, MSCI Islamic, and STOXX Europe Islamic 50—inside one fixed S&P 500 stock list from Q1 2019 to Q4 2023. For each index, we build both equally weighted and market-capitalization-weighted portfolios, then check their performances with the Sharpe, Treynor, and Jensen’s alpha ratios. All Islamic portfolios beat the regular S&P 500 after adjusting for risk, with STOXX as the most stable winner. Its market-cap version reaches a level of 253.01 by Q4 2023, far above the S&P 500 level of 210.46. Market-cap portfolios, in general, perform better than equally weighted ones. Furthermore, STOXX offer better protection in rough markets, while DJIMI shows relatively better performance when prices recover. Most rule sets cause small advantages to the Islamic portfolios compared to conventional ones, but STOXX’s 33% limit on leverage and liquidity results in higher Sharpe ratios. These results suggest that screening details shape portfolio behavior and point to the need for one clear, shared Shariah rulebook so investors can compare products with confidence. From a business ethics view, our study also shows that strict and open screening brings a real “moral dividend”, as follows: smaller losses when markets fall and stronger risk-adjusted returns overall, linking faith-based rules to the wider talk on responsible investing and stakeholder welfare. Full article
(This article belongs to the Special Issue Islamic Financial Markets in Times of Global Uncertainty)
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