Harnessing the Power of Artificial Intelligence and Machine Learning in the Islamic Capital Market: A Comprehensive Analysis

Introduction

The Islamic capital market is a specialized financial system designed to operate in accordance with Islamic principles and Sharia law. It provides a framework for raising capital and making investments while ensuring compliance with ethical and religious guidelines (Bacha & Mirakhor, 2019).

Islamic capital market (ICM) transactions are conducted in manners that do not contradict Muslim conscience or Islam's religion (Hassan & Mahlknecht, n.d.). Here, Islamic rule is asserted so that the market is devoid of practices prohibited by Islam, such as usury (riba), gambling (maisir), and ambiguity (gharar).

The ICM is a component of Malaysia's total capital market. It contributes significantly to the country's economic progress. The ICM operates as a parallel market to the conventional capital market and complements the Islamic banking system in widening and deepening Malaysia's Islamic financial markets (Antonio & Hafidhoh, 2013). Malaysia's ICM remains a tempting location for all stakeholders to this day.

The SC's initial objective in establishing a specialized Islamic Capital Market Department (ICMD) was to offer critical infrastructure support. The ICMD's mandate is to conduct out development and research activities, such as developing and facilitating a long-term plan to enhance the ICM in Malaysia.

Malaysia has also pushed for the introduction of a two-tier Shariah governance framework for the ICM. In May 1996, the Securities Commission Act was amended to include a provision allowing the Shariah Advisory Council (SAC) to issue judgements.

Here's a detailed overview of the Islamic capital market: