INCEIF Knowledge Repository (INCEIF University)
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Asymmetry in mean-reverting behavior of ASEAN stock market returns
No full textThe present paper characterizes the mean-reverting behavior of six ASEAN markets - Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam – using an autoregressive exponential GARCH-in mean model and daily data from August 2000 to May 2010. The results indicate fast speed of mean-reversion in the returns of these markets but with quite distinct patterns of return dynamics. The evidence seems strong to suggest asymmetric mean reversion and overreaction during market downturns in the Indonesian market. The Vietnamese market exhibits most persistent return autocorrelation with some evidence pointing to higher persistence during market downturns. However, there is no evidence indicating significant serial correlation in the markets of Singapore and Thailand. Finally, the leverage effect is documented in all markets except Vietnam. We tentatively attribute these differences to stages of market development and, accordingly their levels of efficiency, and to the degree of market volatility
The role of gold in financial investment: a Malaysian perspective
No full textThe paper assesses whether gold investment provides diversification, hedge, or safe haven benefit for the case of Malaysia using daily data from August 2001 to March 2010. The results indicate that at best gold serves as a diversification asset for Malaysian investors. In the analysis, we also find changing investment role of gold in recent years marked by global financial market uncertainties. The hedge and safe haven properties of gold investment documented in the initial sub-sample have been degraded to only diversification property. Moreover, the extreme market conditions tend to weaken the role of gold as a diversification asset in financial portfolio formation
Performance/commodity-linked sukuk for private and public sector funding: some proposed models
No full textCurrent sukuk structures often fall short of adequately meeting the Shariah conscious investors' needs. The objective of this dissertations is, therefore, to address this issue by conceptualizing and operationalizing three innovative models of sukuk. The first proposed model of sukuk is based on the concept of musharakah and is meant for companies and revenue generating infrastructure projects. The model has an incentive-compatible feature by making the share of the issuing entity in the profit positively related to its performance ..
Do conventional and Islamic finance share common epistemology?
No full textSimply stated, epistemology deals with the question of what we know about a phenomenon and how do we know it. The practitioners use the term Islamic finance industry (IFI) to refer to their activities in designing and trading “Shari’ah-compliant” ways and means of financing. Taxonomically, industries in an economy belong to a sector and sectors belong to subsystems which in turn belong to a larger system. For example, a bank belongs to a banking industry which belongs to the financial sector which belongs to the financial subsystem which belongs to the larger economic system which, finally, belongs to an overall socio-political-economic system. Before the current inception of IFI, there was what could be called a “market failure” in the conventional financial system. There was substantial unmet demand for Shari’ah-compliant financial products. IFI grew out of the conventional finance to meet this demand. Muslim scholars writing mostly since the 1970s about Islamic finance focused on development of an Islamic finance system; they not only emphasised elimination of riba contracts but urged their replacement with risk-sharing contracts. The practitioners, most of whom had been operating in the conventional finance, were however interested in developing ways and means of finance that, while Shari’ah-compatible, would be familiar to and accepted by market players in the conventional finance. The former emphasised Profit-Loss Sharing (PLS), the latter focused on traditional methods of conventional finance centred on risk transfer and risk shifting. This article argues that there are two ideal financial systems based on risk sharing, conventional and Islamic, and one actual conventional system focused on risk transfer. There are two industries within the actual system; conventional and Islamic finance industry. The paper then proceeds to discuss the epistemology and the main characteristics of each of the two ideal systems
Masa hadapan menangani cabaran
No full textBahasa Kebangsaan digunapakai di setiap sektor kerajaan semenjak Bahasa Melayu dijadikan Bahasa Kebangsaan kerana ia adalah dasar negara. Sektor kerajaan termasuklah dalam semua bidang pentadbiran dan pendidikan. Bahkan, untuk mengendalikan program pendidikan didalam Bahasa lain daripada Bahasa Kebangsaan perlukan kelulusan Menteri
The Islamic gold dinar - myths and reality
No full textRecently, there have been an increasing number of publications and conferences on the re-introduction of the Islamic gold dÊnÉr, a coin with pure gold content. The phenomenon could even be construed as a campaign. The proponents of this idea, who are known as denarists and are particularly active in Malaysia, advocate that this country, as well as the whole Islamic world, “urgently” return to the Islamic gold dÊnÉr. Their call has gained considerable urgency in view of the latest crisis in the West. But what the denarists are doing is proposing an essentially historical system (coinage was the norm throughout history) without having studied how the system they are proposing actually functioned in history. The main purpose of this article is to fill this vacuum
Testing regional convergence hypothesis using time-series data: sectoral evidence
No full textAlmost five decades, disparity in income across states in Malaysia continues to be a matter of concern. The existence of regional inequalities and the prospects that these inequalities may widen were recognized by the Malaysian government. The nine volumes of the 5-Year Malaysia Plans reflects the sincerity of the Malaysian government in eradicating if not elevating the problem of regional or states imbalances. The objective of the present study is to investigate stochastic convergence among three regions (Peninsular Malaysia, Sabah and Sarawak) in Malaysia using sectoral data. Using annual data for the period 1968 to 2003 we found that Malaysia's sectoral data exhibit strong and weak convergence between regions
Islamic banking under the Malaysia law
No full textIn the board sphere of the banking world, shari'ah compliant banking has been duly coined as Islamic banking. It does not; however limit the patrons of Islamic banking to Muslims. Today, irrespective of the faith conviction, both Muslims and non-Muslims utilize Islamic banking. Malaysia is considered as the cranium of Islamic banking. This maybe due to the fact Malaysia is among the very first countries that adopted Islamic banking parallel to conventional banking and has progressively sustained it from 1983 up until now..
Bay al-inah and bay al-tawarruq: issues in their applications in modern financial contracts
No full textInternational trade and trade policy
No full textMalaysia's trade policy has always beem prompted by pragmatic considerations. In the pre-Independence period, when the country had scant human resources and little capital accumulation, there was little interest in the export of manufactured products. Instead, the country concentrated on the export of agricultural commodities and minerals