The role of stock market in influencing firms’
investments in Jordan
Authors: Al Hallaq Said Sami , Ajlouni Mohamad M. , Al-Douri Ahmed Shakir 
Published: November 2018

Purpose

With reference to the methodology of Prof Choudhry in his book
“Tawhidi Epistemology and its Applications: Economics, Finance,
Science, and Society” in 2014, in a different context, this study
aims to present the conceptual fundamental of Islamic finance investment,
where investment decisions are governed by Divine law and Islamic
jurisprudence, followed by the empirical nature of real-world issues where
investment decisions are governed by only financial indicators, using the
Amman Stock Exchange as a case study.

Design/methodology/approach

As pointed out by Raderbauer (2011), research and industry initiatives mainly
focus on environmental measures while ignoring the economic and
socio-cultural dimension of sustainability. Recognizing the importance of a
holistic understanding to define sustainable business practices for the
accommodation industry. Financial markets are no exception; moral and values
either coming from secular or religious understanding help to examine
relationships between attitudes and actions, as well as differences in
attitudes and actions related to the business’ characteristics. In
business, ethical considerations apply to a broad list of virtues that
companies, their managers and employees customarily seek to adopt. These
include, but are not limited to, the encouragement of honesty, integrity and
efficiency, as well as diversity and communication skills. One of the most
common sources of ethical considerations is religion. In these cases,
religious doctrine imparts a sense of applied ethics, where one considers
what right conduct is, how to live a life pleasing to the Divine and how one
should treat him/herself and others in accordance with those teachings.
Again, as ethical considerations is a broad philosophical concept, it can
apply to any situation where the person ponders the nature of right and
wrong, how to recognize the difference and the meaning those conclusions
carry for everyday life.

Findings

It can be concluded that the overall the quantitative and qualitative
statistics showed that accommodation business manager’s decision has
had a very little positive attitude toward sustainability and the
implementation of sustainable business practices in ASE financial
transaction, no matter what classification, type of business, ownership or
size of business. Only rules and regulations govern the attitude and
behavior when making financial transactions with profit is the main target.
Moral indicators could not be seen throughout the analysis and test used to
achieve objectives of the study at hand. One can imagine that the combined
two factors together “Moral-Material” in implementing
financial transactions will produce a more beneficial outcome. Achieving a
material and holistic objective will produce an optimum situation, which can
contribute positively to sustainable development.

Originality/value

Islamic alternatives to traditional investment tools have been driven by the
fact that such tools do not conform to the Islamic general principles of the
Shari’ah (Usmani, 2002). There has been a growing desire to have
funds in which profits are not based on riba or interest, which is
prohibited in Islam. Muslims deem that profit should come because of
efforts; this is not the case in interest-dominated investments. In
addition, there is a desire to have investment portfolios, which are morally
purified. Thus, investments in companies that are not in compliance with the
Shari’ah are not permitted and are eliminated from the portfolio. To
ensure compliance with the forgoing condition, Shari’ah advisory
boards whose role is mainly to give assurance that money is managed within
the framework of Islamic laws govern Islamic mutual funds (Hassan, 2001;
Hassan, 2002). On the other hand, dealing with the applied part, the paper
will deal with a case study from Jordan (Amman Stock Exchange), where, code
of ethics is issued by virtue of the provisions of Article 26 (e) of the
Securities Law No. 23 of 1997. The Amman Stock Exchange operates as an
exchange for the trading of securities. The company lists securities such as
equities and bonds. Its activities include providing enterprises with a
means of raising capital by listing on the exchange; encouraging an active
market in listed securities based on the determination of prices and
trading; providing facilities and equipment for trading the recoding of
trades and publication of prices; monitoring and regulating market trading;
and coordinating with the Jordan Securities Commission as necessary. The
company’s activities also include ensuring compliance with the law,
fair market and investor protection; setting out and enforcing a
professional code of ethics.