INCEIF Knowledge Repository (INCEIF University)
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1768 research outputs found
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Risk-return profiles of Islamic equities and commodity portfolios in different market conditions
No full textMotivated by the recent phenomenal growth in Islamic finance and the financialization of commodities, this study makes an initial attempt to investigate the risk return profiles of optimized portfolios combining (a) Islamic equities with commodities and (b) conventional equities with commodities during the crises and noncrises periods. The findings tend to indicate that Islamic equity-commodity portfolios provide relatively higher diversification benefits than the conventional equity-commodity portfolios during the 1997 Asian Financial Crisis triggered by the financial sector compared to the 2008 global financial crisis triggered by the real housing sector. The findings further suggest that except for a few cases, commodities in general and gold in particular improve diversification benefits
Financial market integration and its risk sharing implication in selected Islamic countries
No full textThis study empirically investigates the financial integration threshold effects and risk sharing implication for Islamic countries from 1980 - 2011. The study utilizes threshold effect technique for the non-dynamic panel introduced by Hansen (1999). We focus on the four different types of financial market integration measures, which are (i) full financial market (ii) equities (iii) capital market and (iv) governance. We found that there is single threshold effect for equities and governance and a double threshold effect for full financial market integration and capital market ..
Towards risk-sharing regulatory framework: a case for Malaysia
No full textThis dissertation studied the efficacy of contemporary Islamic banking regulatory framework in promoting risk-sharing finance. Malaysia is selected as a case study given its strengths as an advanced and comprehensive Islamic financial market. The study found that, risk-transfer philosophy is dominant in the design of the regulatory framework for both the Islamic and conventional financial systems. Harmonizing the regulations of the two markets is necessary to minimize regulatory arbitrage and ensure that both are governed at the same level of regulatory robustness. An unintended consequence however is the deep entrenched risk-transfer paradigm that permeates into the way Islamic banks operate. Risk transfer runs counter to the spirit of Islam that espouses for the proper exchange of property rights in Mu'amalat transactions. For example the use of credit enhancements (such as Wa'ad and ar-Rahnu) is rampant as devices to transfer the risk that the bank must undertake, back to the customers
Trust, ethics, stock markets and economic growth
No full textBy 2007, more than US$ 15 trillion was held by over 91 million individual investors in stocks and corporate bonds, either directly or through mutual and pension funds. These massive investments and financial markets could not have conceivably reached such a size had it not been for most people having trust in their investments and the common belief in others' trustworthiness. However, scandals associated with the 2007/2008 financial crisis have eroded trust in the financial system. As a result, the need to understand forces contributing to financial market development and instability has been placed at the center stage of global policy and academic discussions. A sound and stable financial system underpinned by strong institutional quality and social capital has become an object of search
Sudan Academy for banking and financial sciences and its vision as a hub of Islamic finance in Africa
No full textThe practice of Islamic banking has become a fast growing and widespread phenomenon, not only in the Muslim countries, but also in the Non-Muslim countries too, such as UK, USA, Canada and Singapore. The transformation from a conventional form of banking to a banking system based on interest-free banks has generated a great deal of interest to call for Human Capital Development in the field to ensure sustainability, good performance and good competitive market in the Islamic financial industry. Even though Sudan is the pioneer in taking the initiative of Islamizing its financial industry since 1980s, yet we realized that other countries are taking the leading international and regional hub of Islamic finance such as Malaysia in the Asian region and UK in European countries, and recently Canada is also calling to become one of the hub of Islamic finance in the far west. Africa is also highly expected to host many Islamic financial institutions in the near future as there is a great demand for the Islamic financial products. This urged the authors to shed some light on the role of Sudan Academy for Banking and Financial Sciences and its vision to become a hub for Human Capital Development and in promoting Islamic Finance not only in the African region but also in the Arab countries too
Mitigating shadow economy through dual banking sector development in Malaysia
No full textTheory argues that as long as the shadow economy is of sufficient size, the leakage or loss of tax revenue through tax evasion will also be substantial. In this chapter, we provide new estimates of the size of the shadow economy in Malaysia for the period 1971-2013. Further, we relate the shadow economy to its determinants as measured by the misery index. This chapter reveals that the relationship between the shadow economy and financial development in Malaysia exhibits an inverted U-shaped curve. The chapter concludes that the Malaysian government should embark on programs that can reduce the size of the shadow economy, relying on its dual banking system of Islamic and conventional banks
An analysis of market structure and competitive dynamics in dual banking systems
No full textIslamic banks have proliferated and emerged as important players in the global banking industry especially in the Muslim-Majority countries. The recent increase in the number and market share of Islamic banks has intensified the competition in this new industry. Despite its importance, the increasing competition in Islamic banking market not only from its own Islamic peers, but also from commercial banks has not been adequately addressed nor its consequences have been investigated. This summary aims to shed the light the market structure and the evolution of the competition under dual banking system
How sukuk can play its role to drive the growth of sustainable and responsible investment
No full textThe imminent intergenerational wealth transfer from Baby Boomers to their heirs who are members of Generation Y, the Millennials, and Generation Z means that the financial institution that ignores ESG in its operations and financing does so at the risk of ignoring what matters to the bulk of its future customers. These emerging generations have made no secret of their preference that their assets generate social benefits and positively impact the environment in addition to yielding the expected financial benefits
Will the circle be unbroken?
No full textAs many of you will have heard, I shall be retiring from INCEIF shortly. This does not mean that I am retiring from Islamic Finance and Life in general. It does mean I shall be able to spend some more time with family and to reflect and act on some key focus areas with which I will still continue to be engaged. Make no mistake, I shall remain involved at INCEIF, but just in a different role
Income inequality reduction through alternative financial institutions to riba (an Islamic approach)
No full textAccording to the World Bank Statistics (2012) more than 80% of the world's population live in countries where income inequality is very wide. The latest Oxfam report shows that the richest 1% of the world population holds over 50% of the world's wealth. This means that 62 richest people own an estimated wealth of US$1.76 trillion which is equivalent to the wealth of 3.5 billion people who make the poorest half of the world population (2015). The failure of the capitalist system in reducing this income inequality encourages economists to provide justification for this huge gap between the rich and the poor. Some economists believe that the main causes of this income inequalities is due to the unjust financial system which is based on interest/Riba while others tried to provide solution to this problem