INCEIF Knowledge Repository (INCEIF University)
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Wealth effects of corporate sukuk announcements and risk dynamics: a multi-country study
No full textThis thesis evaluates the wealth effects of corporate Sukuk issuances, based on specific sample traits, for the three largest issuing countries: Malaysia, Indonesia and Saudi Arabia. The sample traits include underlying structure, size of issuance and tenor. Previous studies are inconclusive and relate mainly to Malaysian firms only. This could be attributed to the failure to incorporate the effects of Sukuk types, properly identified crisis period effects and market differences. Bai-Perron (2003) break-point analysis is used to correctly identify the crisis periods for the sample. Event study methodology is applied to ascertain market reaction to announcements for a 51-day announcement window: (-40, +10). The cumulative average abnormal returns were estimated after adjustment for non-synchronous trading using the Scholes and Williams (1977) technique and cross-correlation using the Kolari-Pynnonen (2010) method. Similar break-points were observed for Malaysia and Indonesia, whereas Saudi Arabia had delayed and sustained contagion effects. For wealth effects, the results imply that sample traits affect market reaction significantly. The Malaysian market reacts positively to debt-based issuances before and after the crisis. Reaction to equity-based issuances is significantly negative after the crisis. Reaction is positive for larger issuances and shorter tenors. The Indonesian market reacts positively to debt-based issuances during the crisis period. This can be attributed to high issuer ratings, small issuance size, short tenors and high demand. Saudi market reaction is negative post-crisis, similar to the market reaction to convertible bond announcements as documented in the literature
Discussion on affordable housing problem: with special reference to the concept of brotherhood, waqf & zakat
No full textThe slides highlight: 1) issue and challenges of affordable houses; 2) Islamic teaching help in providing affordable housing; 3) creation of waqf to meet demand for affordable houses; 4) successful cases in transforming idle waqf properties into productive waqf properties
Dispelling the myth of a value premium: contrary evidence of Malaysian crony capitalism
No full textThis study aims to dispel the myth of the value anomaly by employing the logic of the well-known Austrian British philosopher Sir Karl Raimund Popper, who espoused that positive outcomes of empirical observation cannot confirm an anomaly, such as value premium (Popper, 1953)
Putting more R.I.C.E in Islamic banking research
No full textThe rapid development of the Islamic banking sector in many Muslim countries especially in Malaysia and the Middle East and its increasing acceptance in non-Muslim world has captivated much interest in recent years. Its alleged resiliency during the recent global financial crisis has prompted some to offer the Islamic banking model as a solution to the malaise of the present interest rate-based banking system, normally dubbed as the conventional banking system. A pre-dominant view among Muslim professionals and policymakers holds Islamic banking to be more equitable and more stable, aspects well-noted to be critical for societal well-beings. This view is principally based on the belief in the Islamic banking business model as prescribed by Islamic laws or the Shariah. Islamic banking is free from interest rate and gharar, which are the root of injustice, speculation and uncertainty
Culture, income, and CO2 emission
No full textGiven the devastating effects of global warming, the problem of human-induced climate change, and in particular carbon dioxide emissions, has been high on the global policy agenda. In this study, we examine the relationship between national culture, carbon dioxide emissions, and economic growth in the framework of the Environmental Kuznets Curve (EKC). Applying system GMM panel estimator across 69 developed and developing countries, we confirm the existence of EKC and show that culture significantly affects the income-emission relationship. Moreover, the effects of the six cultural dimensions on EKC can be collapsed into two: (i) masculinity, power distance and indulgence move the EKC upward and shift the income turning point to the left; and (ii) individualism, uncertainty, and long-term orientation move the EKC downward while shifting the income turning point to the right. The impact of culture on EKC remains also robust for alternative specifications. Future policy and global initiatives in sustainable development should incorporate the multidimensional impact of culture on national behavior towards environment and economic growth, a relationship that has been largely ignored in economic decision-making models
Shadow economy and financial sector development in Malaysia
No full textThis paper explores the link between the shadow economy and financial sector development in Malaysia for the period 1971-2013. We calculate the size of the shadow economy by using the modified-cash-deposits-ratio approach recently developed by Pickhardt and Sardia (2011). We investigate the contention made by Blackburn et al. (2012) that financial sector development can mitigate shadow economy, higher level of financial sector development lead to lower level of shadow economy. Our results show that there is a non-linear long-run relationship between shadow economy and financial sector development in Malaysia, an inverted-U shape curve, suggesting that at lower (higher) level of financial sector development commensurate with higher (lower) level of the shadow economy. One policy implication from this study is that the financial sector can play an important role in reducing shadow economy by improving the accessibility to financing and to the credit market
Risk sharing in the age of crises
No full textIn her book, Payback, 2008, Margaret Atwood claimed: "In Heaven, there are no debts, all have been paid, one way or another; but in Hell there's nothing but debts, and a great deal of payment is exacted, though you can't ever get all paid up. You have to pay, and pay, and keep on paying. So Hell is like an infernal maxed-out credit card that multiplies the charges endlessly." Publication of this book coincided with the Crisis of 2007/2008. Since then, there has been a proliferation of books on the subject of debt, beginning with a book by Reinhart and Rogoff, This Time Is Different. In the book, the authors argued that "though labeled as banking or currency, or even balance of payment crises--all financial crises are at root debt crises. Massive accumulation of private speculative debt in the run up to the 2007/2008 crisis showed that this time was no different". Aside from many books, well-researched theoretical and empirical papers published since then have established a nexus between credit, debt, leverage and onset of financial crisis
Recent Islamic finance developments in Maldives
No full textMaldives Islamic Bank marks five-year presence in Maldives. Maldives Islamic Bank (MIB) celebrated its fifth anniversary on the evening of the 18th March 2016 at Hotel Jen Maldives. The guest of honor at the event was Khalid Aboodi, CEO of the Islamic Corporation for the Development of the Private Sector, who thanked the government of Maldives for its efforts to establish and facilitate the growth of an Islamic bank in Maldives
The implementation of internal control system among Malaysian credit co-operatives
No full textThis study aims to examine the perception on internal control system (ICS) practices among Malaysian credit co-operatives. Specifically, this study provides input to those who are involved in developing ICS in co-operative namely, the Board Members (BOARD), Internal Audit Committee (IAC) and management staff. Using Malaysian Co-operative Societies Commission (MCSC) definition on classification of co-operatives, four groups of respondent cooperatives based on size of cooperatives were developed i.e. micro, small, medium and large. After eliminating with incomplete data, 536 co-operatives were selected to be included in this study, where, two questionnaires were mailed to co-operatives' BOD and IAC. After three follow up procedure, 22% of the respondents returned the questionnaire. To compliment the questionnaire analysis, a case study on four co-operatives using unstructured interview questions was conducted. The data was analysed based on three themes namely ICS awareness, readiness and practices. It was found that the majority of respondents are highly aware on the importance of ICS and they believed that ICS should associate with monitoring activities. Consistently, the large majority of the respondents pointed out that, their co-operatives are ready to perform ICS in the perspective of human resource, knowledge, and training. On the other hand, the majority of Malaysian credit co-operatives are not ready to provide sufficient financial resources to appoint competent and skilled staff. Finally, the majority of the respondents (> 80 percent) have performed 60 percent of the ICS components presented to them. Also, 56 percent of the respondents submitted periodic report to the MCSC as required by the law. These findings indicate that Malaysia credit co-operatives are aware and ready to perform ICS towards good governance in the interest of their members
Financial rights in the Islamic perspective
No full textThe rights of individuals are very much important in societal living, as it is with these rights that an individual man has the authority or capacity to carry out actions within the jurisdiction already specified to him by Shariah. It is within this specific boundary of rights that a man is confined to what is rightfully to be appropriate in action, which in the meantime will not cause him to harm another individual. This means that once he transgresses his specified rights, he is therefore subject to the law by any means necessary. Financial rights, among others is another right that is important to an individual, partner, neighbour as well as to others where the situations deemed suitable. It is the rights on assets which are of financial value as acknowledged by the Shariah