A Comparative Study of Stock Screening Methodologies in Stock Exchanges of Bangladesh and Malaysia and Lessons to Be Learnt

Abstract

The study aims to compare and critically evaluate the stock screening practices between Bangladesh and Malaysia. The study is descriptive in nature. Secondary data is utilized and collected from the books, standards, journal articles and relevant publications. It is found that exchanges of both countries differ in formulating ratios, denominators, numerators and in determining benchmark. A stock can be categorized as Shari’ah compliant in Bursa Malaysia, but may be non-Shari’ah compliant in Dhaka Stock Exchange (DSE), and Chittagong Stock Exchange (CSE). Though, Malaysia observes the same guidelines throughout the country, but this is not the case for Bangladesh. A stock may be considered Shari’ah compliant in DSE but not in CSE and vice versa. After analyzing, it is clear that DSE and CSE may improve their ratios and it is also advisable to use single methodology at least in one jurisdiction to avoid the confusions among masses. The findings of the study will help the authority to look at the deep insight of the issue and update the current criteria.