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Wealth and property are the pride and splendor of humans, in so, those who are willing to donate could be considered as those seeking Allah's (s.w.t) blessing and mercy. Therefore, the practice of establishing and donating to waqf is an important medium to draw oneself closer to Allah (s.w.t). By willingly giving away things that are most loved, one is deemed to get Allah's (s.w.t) blessings. Apart from being a source of development for the economy of Muslims, this practice is strongly encouraged in Islamic doctrine given the benefits it guarantees in the hereafter and this world ...

Majority of Shari'ah scholars maintained the opinion that conventional insurance is not permissible in Shari'ah due to the elements of gharar "uncertainty", maysir "gambling" and riba "usury" that was found on it. This necessitated the establishment of takaful "Islamic Insurance" in the late 1970s, but this also did not go without criticisms as there are different opinions among Islamic scholars and also legal and regulatory practitioners on the permissibility of surplus sharing and takaful models that has been adopted by takaful operators ...

Islamic finance assets in several countries comprise significant part of the financial system. In these countries there are certain issues that are unique to the Islamic finance and are overlooked by stakeholders, most importantly regulators. This paper investigates that Islamic finance product structuring, through a chain effect, may influence the financial stability of the Islamic financial system in a country. This is demonstrated through the securitization chain of an Islamic Mortgage Backed Security (MBS) to show that Islamic product structuring decisions at the retail level have a chain impact on the investor base for an Islamic MBS deriving from the mortgage assets ...

This paper investigates the target capital structure adjustment by Malaysia and Singapore, with a view to determine whether they exhibit similar behaviour. Firms may temporarily diverge from their target capital structure but seek to return optimal capital structure when indications of crisis are seen as well as in the aftermath of a crisis. Firms which are not on their optimum capital structure face high detrimental costs for being in such a position ...

This paper examines the long run relationship between Vietnam stock market and her ASEAN partners like Malaysia, Singapore, Thailand, Indonesia and the Philippines. The paper uses the weekly data from July 2006 till February 2014 and run through an analyzed using time series techniques in order to test for cointegration of Vietnam stock market with ASEAN members. Eagle-Granger, Johansen-Jeselius (JJ), and Vector Error Correction Model (VECM) methods are used in analyzing data. The results obtained from JJ test find at most one cointegration among ASEAN members ...

The paper explores the economic and security dependence of an entity on others as reasons for the inability to implement military intervention by applying forecast error variance decomposition (FEVD) on economic and security data. Specifically, the paper evaluates the economic and security dependence of the Organization for Islamic Cooperation (OIC) on the United Nations (UN) Security Council to understand OIC's inability to initiate military intervention in OIC member countries ...

The ability of banks in giving out loans and investments depends very much on their ability of attracting deposits. Unlike its conventional counterpart, Islamic principles forbid Islamic banks to take any interest-related income amid the fact that deposits are an important source of fund for its operational and financing. Consequently, the risk of deposit withdrawal by depositors is an important aspect that should be well managed in both conventional and Islamic banking system. Therefore, the objective of this study is to examine the effect of selected economic and bank specific variables on deposits placed at the Islamic and conventional banks ...

This paper aims to empirically study the impact of interest rate and exchange rate risks on Islamic bank stock returns. The data for this study is obtained from the Datastream for the period between 1996 and 2013. The methodology employed is the standard linear regression and EGARCH estimation models. The dataset used in this study involves 39 full-fledged Islamic banks across the globe. The empirical evidence reveals that market risk is the major determinant of the sensitivity of Islamic bank stock returns. Both methods are used in this study indicates that the coefficients of market rate returns ...

Financial intermediaries such as banks face different risks during the course of their business. Handling these risks become more challenging especially while operating in a competitive market environment. As Islamic banking industry is relatively new, an adequate regulatory and legal framework to support the industry is still lacking in many countries. Further the nature of risk faced by Islamic banks in certain circumstances is different at the organizational and product level as compared to their conventional counterparts ...

After the 1997 Asian financial crisis, conventional bond and sukuk have become one of the major financial instruments for private and public listed firms in Malaysia to raise capital. In order to continuously attract both foreign and domestic investors and to maintain their participation in the bond and sukuk market it is vital that the regulatory authorities continuously strengthened corporate governance practices and regulatory framework to protect and safeguard the bond and sukuk holders' interest ...

Studies of Islamic banks' profitability are an important tool towards improving performance, evaluating bank operations and determining management plan to help in increasing the chance for the banks to survive in competitive markets. The robust growth in financing and investment activities across most jurisdictions in various real sectors has helped Islamic banks to record generous asset growth rates in their balance sheets. However, the returns become subdued during the financial crisis of years of 2008-2009, reaching lows of ROA 0.74% and ROE 6.16% in 2009 (IFSB, 2014). Over the last twenty years, market conditions in banking sector have undergone extensive changes on both demand and supply sides ...

Islamic financial instruments differ from conventional instruments because of their risk sharing and justice factor. Talking specifically about fund raising instruments, Sukuks are the most vital and demanded instrument. Despite of its risk sharing and equity feature, Sukuk defaults yet happened which eventually raised several questions on the viability of these instruments and their treatment in a distressed situation that provides us with another avenue of research on these instruments. In this paper, we analysed five major Sukuk defaults that happened recently in the aftermath of the 2007 global financial crisis ...

Theoretically, a monetary policy intervention of a central bank in form of exchange rate devaluation will make exports of such a country cheaper with a resultant increased competitiveness. However, should developing country such as Nigeria that is mostly import-dependent adopt the same approach? Will a greater focus on the structural and developmental changes be a better option? In a long-run, what is the lead-lag relationship between exchange rate and the Balance of Payment (BOP)? These are issues this project paper sets out to empirically investigate through a multivariate vector error correction framework ...

Islamic microfinance provides an alternative model for a significant number of underprivileged people who are not served by conventional microfinance. In order to give access to sustainable services to a greater extent, the Islamic microfinance is in paramount need of the adoption of innovative business models and sound practices into the industry. To this end, the research seeks to provide theoretical basis, operational framework, and empirical support for the establishment of Islamic microfinance institutions. The theoretical discussions and empirical evidence will emphasize on the importance of social financial intermediation to finance microenterprises and a need to develop specialized model to do the same. Problems facing by conventional micro finance institutions include non-graduation from poverty, debt trap, high dropout rate, asymmetric information and economic visibility of the project. The study finds that waqf based microfinance institutions can play an important tole inter alia in financial inclusion and developing socio-economic conditions of the poor and underprivileged people in society.

To codify or not to codify, is, in matters of the law, the paramount jurisprudential question. More so when the laws in question relate to and are to govern a relatively budding industry, such as that of the Islamic banking and finance (IBF) industry. This paper examines the respective legal and regulatory landscape of four countries, Saudi Arabia, Pakistan, Sudan and Malaysia vis-a-vis IBF, particularly whether the presence or absence of codified Shariah law for IBF matters play any role in the development of their respective IBF industries and whether Malaysia can draw any lessons from the experiences in Saudi Arabia, Pakistan and Sudan to ascertain the need/viability/manner in which to promulgate codified Shariah law for IBF. To conduct the study, data pertaining to the legal and regulatory frameworks governing the IBF industry in Malaysia, Sudan, Saudi Arabia and Pakistan together with information on the respective development and growth of Islamic finance in the said countries had been collated through library research and country case studies. Whilst it is found that the lack of (properly promulgated) codified Shariah law for IBF has hampered the overall development of IBF, it is also the case that codification whilst necessary is not sufficient. Political will and qualified legal personnel are also vital elements for the legal and overall development of IBF. Having said that, this paper advocates the codification of Shariah law for IBF in Malaysia, in the hopes that Malaysia can provide a model for other countries to emulate, as it has done so hitherto vis-a-vis other areas in IBF.

This paper analyses the relationship between oil price and bank performance in net oil exporting countries and non-net oil exporting countries. Using data on 74 Islamic banks consisting of 36 Islamic banks in net oil exporting countries and 38 Islamic banks in non-net oil exporting for a period of 2005-2015, we test the hypotheses of oil price direct and indirect effects on banks performance. Our results indicate that oil price has a significant negative direct and indirect effect on bank performance, through its bank-specific variables and macroeconomic variables in net oil exporting countries while, none was found in non-net oil exporting countries.

The paper examines the level of awareness of the people in the Kyrgyz Republic about Islamic Banking and Finance and whether they are willing to adopt an Islamic financial system in the country. It also attempts to explore population's opinion of the mechanism of the banking business in general. Questionnaire forms were developed and distributed among 300 nationals. It has been found that while a small proportion of the practicing Muslims have some notion of Islamic Banking and Finance, non-practicing Muslims and non-Muslims almost completely lack in this field of knowledge ...

The purpose of this study is to initiate a drive towards standardisation of Islamic finance terminology for academic use, encourage the use of search engine data in Islamic finance research and create a methodology for choosing research keywords special to Islamic finance. Islamic finance terminology is defined for the purposes of this study as the Arabic/Islamic terms unique to Islamic finance literature written in English. Because of its organic evolvement across different geographical regions, there is no standard spelling of these Islamic finance terms (IFTs) ... Kindly email to kmc@inceif.org to access the item.

In the last decade, Malaysia has witnessed a growing number of corporate takeover exercises. The growth in the asset management industry meant that the role of institutional investors have become more important in these corporate takeovers. Neither the synergistic gains hypothesis nor the information effect hypothesis were able to fully explain the market responses to takeover announcements and the gains derived from corporate acquisitions on whether the offer is successful ...

Income inequality isn't new thing, but recently it has made it presence in news, political discussions etc. It has now become the key and defining challenge of our time. Both the developed and developing countries have reported massive amount of income disparities within their respected countries. In this paper we study the links and effects of the macroeconomic variables especially economic development and financial development on income inequality. We restrict our study to OIC countries. Simon Kuznet hypothesis is taken as the theoretical basis for this study ...

This research aims to examine the exchange rate regimes of 12 MENA countries. The sample is composed of the 6 GCC oil exporting countries, most of which have pegged their currency to the US dollar, and another 6 Arab countries that have different exchange rate regimes. The objective of the study is to determine the extent of over and undervaluation of these MENA currencies. The results show that official peg to the US dollar does not reduce the amount of deviation from the equilibrium exchange rate. Also, countries which had their currency pegged to a basket of currencies had lower currency fluctuations than others ...