INCEIF Knowledge Repository (INCEIF University)
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1768 research outputs found
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Factors influencing the penetration rate of Malaysian takaful industry from takaful managers' perspective
No full textThe first takaful company was established in Sudan in 1979. It was no until six years laters that the first takaful company was established in Malaysia, which is Syarikat Takaful Malaysia after the promulgation of the Takaful Act in 1984. Malaysia has emerged as the largest Takaful market in South East Asia and the second largest after Saudi Arabia with a contribution of US$ 0.9 billion in 2008. (Ernst and Young World Takaful Report, 2010)
A critical assessment of the waqf law being prepared by IDB/IRTI and Quwait Foundation
No full textThere is a huge need in the Islamic world to revitalize the waqf system. The currently dilapidated state of waqfs in most countries should actually be considered as an opportunity to design a thorough reform taking into consideration not only the classical Islamic waqf law but also the latest practices and norms in the west. It is to be hoped that such a synthesis of the classical Islamic and modern western practices and norms in conformity with the Shariah will lead to an ideal waqf law that can be of vital importance for the restoration of this institution
Is the long term-profit rate of Malaysian sukuk a good predictor or short term profit rate?
No full textDecomposition of yield curves is important for pricing of fixed income instruments, inflation management, and modeling term structure of interest rates. Therefore, this study investigates whether the long term profit rate of different classes of Sukuk (Islamic bond) is a viable predictor of future spot profit rates. Data on Malaysian Sukuk from 2001-2010 was used to estimate yield curves and forward rates. Regression findings suggest that the forward rate is a weak predictor of future spot profit rate, implying long term profit rates are not average of future spot rate s on long term Sukuk. The findings do not support the expectation hypothesis. However, comparison with securities of the same default risk, but with different maturities, reveals the presence of an-in-bulit support for term premium in the yield curves of corporate Sukuk. This finding is consistent with the Liquidity Preference Theory. We also find further support for Market Segmentation Theory as we find a humped shaped yield curve in the Sukuk marke
Human capital and economic growth: secondary school or higher school?
No full textThis study sets out to investigate the linkages between economic growth and human capital by employing the dynamic panel system GMM estimator with the focus being on secondary school and higher school education as the human capital proxy. The data was averaged to 7 points based on a sample of 62 countries spanning from year 1970 to 1999. Control variables such as gross capital formation, export and population were also decoded in order to obtain more accurate and robust results. Further desegregration of human capital was also done based on the development of the countries. The data was extracted from the World Development Index 2007 and a study by Barro & Lee (1993). The selection of human capital proxy in this study differs from most studies conducted which used education expenditure and enrolment numbers as the proxy
Do debt markets price sukuk and conventional bonds differently?
No full textA new type of debt securities called sukuk certificates have grown to US $840 billion in 11 financial markets as of 2011. These Islamic debt instruments share some features similar to conventional bonds, so market operators treat both as bonds. Whether it is appropriate to treat sukuk certificates as conventional bonds is empirically tested in this paper. If the yields of sukuk are the same as those of conventional bonds, Granger causality tests could confirm their equivalence. Practically the tests show otherwise. Also, the yields of sukuk instruments are significantly higher than yields of conventional bonds even after controlling issuers, rating quality and tenure in matched samples tests. Finally, sukuk issuance affects the issuing firm's beta risk significantly, which is consistent with capital structure theory. These new findings on the 10-year old Islamic debt market have regulatory and market making policy implications as to whether sukuk instruments should be classed as a new class of financial instruments, and not as bonds. Future research and market practices have to re-investigate a number of issues anew because sukuk market is for a different class of deb
Auditor in dilemma: the case of non-audit services
No full textEvidence of audit failures documented worldwide have led to major criticism of the auditing professions' independence and exposed its implication on shareholders and stakeholders' interests. External auditors are expected not only be independent but more importantly must be seen to be independent when examining and attesting clients' financial statements. Auditors are expected to decide on reporting strategies without any influence from their clients' management
Profit and loss distribution and pool management framework for IBIs in Pakistan: progress, issues and implications
No full textPakistan is among the three countries that opted for economy-wide transformation to Islamic financial system in 1980s, the other two being Iran and Sudan. But the ‘non-interest based’ banking system introduced in mid-eighties was declared un-Islamic by the ‘Federal Shariat Court’ because the same was largely based on ‘buy-back’ (bai‘ al-‘Inah) and sale of debt instruments (bai‘ al dayn). In the new system introduced since December 2002, Islamic banking institutions (IBIs) operating in parallel with the conventional banks are using murarabah as the major mode to raise investment deposits from individuals as also the corporate sector. But based on the assumption that depositors’ risk tolerance level is close to zero, they have been giving profit to the investment depositors comparable with their conventional counterparts by way of discretionary hibah without proper disclosure. The rules of murarabah were not being followed in letter and spirit. The main issue was to give arbitrary gifts to priority depositors. The State Bank of Pakistan recently issued a comprehensive profit distribution and pool management framework in order to improve transparency and bring standardization in the IBIs’ practices while taking care for stability of the system. This paper analyses the new framework and finds that the SBP has taken a step in right direction to replace the indiscriminate use of hibah with a well thought-out profit distribution and allocation procedure along with provisions for specific reserves necessary for sustainability of the system
Measuring the impact of microcredit on microenterprise in urban Malaysia
No full textThis study was undertaken to assess the impact of Amanah Ikhtiar Malaysia's (AIM) microcredit program on microenterprise assets possessed by poor women in urban Peninsular Malaysia. In order to fulfill the above mentioned objective, in an attempt to increase understanding on the subject matter and contribute to the existing knowledge, this study employed a cross-sectional design with a stratified random sampling method. The results of this study reveal that the current market value of enterprise assets and vehicles owned by old respondents was relatively higher than that of new respondents. The findings also show that the mean market value of microenterprise assets owned by old respondents was significantly higher than that of new respondents. This study suggests that AIM should, therefore, focus on providing adequate training, flexible and diversified loan programs, and increase outreach. The government of Malaysia also needs to review policies to provide a favorable environment in order to promote self-sustainable competitive microenterprises
Islamic wealth management and issues in waqf management in Malaysia
No full textAfter 250 years of unbridled pursuit of laissez faire, cross-border free trade via open economy theories and unbridled capitalism over the last four decades, a watershed appears to have been reached at the start of the 21-st century. Mercantilism of the 18-19th centuries gave way to an open economy model of freer trade in goods and services
