1. Scholarly Works

An effective system of rules, practices and processes by which Islamic Financial Institutions (IFIs) are directed and controlled to ensure their business operations are Shariah-compliant, which has important implications on their reputation, Shariah governance and the future growth of Islamic finance industry. Sixteen Chairmen of the Shariah Committees of Islamic financial institutions in Malaysia were interviewed on the challenges faced in carrying out their responsibilities and theri views on effective Shariah Committees. This paper summarizes the various challenges faced by Shariah committees in Islamic financial institutions in Malaysia.

This study aims to investigate the reaction (in terms of returns and volatility) of Gulf Cooperation Council (GCC) country-wise stock markets (both conventional and Islamic) in response to the surge of COVID-19 cases, with special reference to the announcement of financial stimulus packages in each country and the recent global oil price plunge. Further, the study also examines the impact of COVID-19 cases on the stock market returns of each GCC country and the continuous dynamics of correlation between COVID-19 cases and GCC stockmarkets. This study uses an exponential generalized auto regressive conditional heteroskedasticity model and continuous wavelet coherence to estimate the stock market volatility and comovement between COVID-19 cases and stock returns. Empirical findings indicate an adverse reaction (negative returns and high volatility) during the period examined, with the stimulus package resulting in a positive transformation of returns in each country-level stock market as well as the regional stock index. Further, no evidence of an adverse effect of the oil price plunge is identified. All findings are identical between both conventional and Islamic stock indices. While ample research has been conducted on the impact and dynamics of the pandemic on stock markets, little has addressed the areas of financial stimulus packages and the oil price plunge. The findings of this study show that further research needs to be conducted to elucidate the ways in which effective financial stimulus packages can be formulated in the GCC region to mitigate the adverse effects of COVID-19 for economies without causing major financial deficits, as well as to find strategies to diversify economies away from the oil curse.

This paper aims to examine existing halal certification regime in Maldives and address impediments therein that challenge and inhibit the growth of the country's halal industry in relation to fisheries products. This is qualitative research based on first-hand experiences of the authors in the halal certification process in the Maldives. Doctrinal methodology is used in the analysis of primary sources of data, including Maldivian laws and halal certification regulations to identify issues of practical relevance. This is complemented with content analysis of secondary data sourced from journal articles, books, reports and online databases that were examined in identifying hindrances and loopholes in the halal certification process. Fish is generally halal, but processed fisheries products cannot be so deemed when certain additives and enhancers are constituents therein. At the moment, Maldives halal certification pertains only to fisheries products. Against this backdrop, this research identifies knowledge gap, legal and governance constraints pertaining to capacity as impediments towards the halal certification of such products in the Maldives. Such concerns hinder the Maldives from tapping the socio-economic benefits of the halal certification of its fisheries products to the desired level in the development of its halal industry.

Working capital is important for any firm and its administration is acknowledged as an essential of corporate administration. The main objective of working capital management is to choose the appropriate levels of the working capital components in order to ensure that the firm is able to meet its operating expenses and mitigate risks of default on payment of short-term obligations. In addition, working capital management is important for a firm’s survival because of its effects on a firm’s profitability and risk, and consequently its value (Gimeno, Folta et al. 1997) (Gunay and Kesimli 2011) and (Deloof 2003). Failure to manage working capital in prudent manner may lead to liquidity crisis and reduction in profitability, affecting the ability of firm to continue its operations.

The primary goal of this paper is to explore the viability of initiating Islamic finance (IF) in an unchartered economy. Canada is taken as a case study for this paper. To achieve our objective, we proceed in two stages. The first stage involves the analysis of market opportunities for IF. More precisely, the first stage involves the cost/benefit analysis which would enable the IF industry to see whether it is feasible for them to initiate. Second, the more challenging stage involves the analysis with regard to the barriers in offering IF products.

The capital structure choices of a firm not only determine the current value of the firm, but also largely determine its long-term survival. Modigliani and Miller's seminal 1958 paper explicates conventional firms' capital structure choices. However, we are yet to develop a solid theoretical framework about the financing decisions of Islamic firms. This is a review chapter on current developments in the field of Islamic capital structure. The chapter starts with a short discussion about the various sources of capital and their advantages and disadvantages, followed by a detailed description of traditional capital structure theories and their real-world empirical evidence. Finally, it discusses how the capital structure decision for Islamic firms differs from that for conventional firms, and the role sukuk, dual-banking system, and debt threshold play in determining Islamic firms' capital structure

The sum of global Islamic assets under management (AUM) is relatively small compared with the overall market. In the third quarter of 2015, Islamic AUM represented approximately 1% of the global market or US$60.2 billion; nevertheless, Malaysia contributes the largest portion with a total value of US$27.2 billion, according to data from the International Shariah Research Academy for Islamic Finance and Zawya. Chart 2 illustrates the position of Malaysia as a market leader for Islamic fund management. Growth in this industry, even if it’s small, would be a significant boost to the Malaysian economy and crucial when we need to diversify our economy in order to reduce the over-reliance on commodities. However, we are facing a number of challenges, some of which are expounded in the following paragraphs.

Shari'ah provides the basic tenets of the Islamic finance industry and advocates banks to share their profits and losses with investors. But what it means for a firm to be "Shari'ah-compliant" and what form of connections it can have, even in theory, to either the firm's value or profitability is still an untapped question. This study tries to answer this question. This study aims to find the impact of Shari'ah compliance on firm performance. The results obtained would be useful in helping investors, regulators, companies, government, academicians and practitioners in their decision-making process as to ensure better economic and business gains, both locally and globally. Panel data on 634 Shari'ah-compliant firms have been used in this study for the period of 2000-2014. The results indicate that Shari'ah compliance adds to the value of firms as firms perform transactions according to Shari'ah while avoiding non-permissible activities. This study adds value to the existing literature by showing the statistical results for the impact of Shari'ah compliance on the performance of the listed firms on Bursa Malaysia.

Shariah committee independence has been highlighted by the Shariah Governance Framework as an important credential for an effective functioning of Shariah committees. This study examined Shariah committee independence of local IFIs as perceived by the shariah committee members of the IFIs. The results identified Shariah committee independence safeguards and threats, and implied better effectiveness through clearly defined meaning of independence and guidelines or code of best practices as a guide for the committee and related parties.

This chapter aims to logically show that the contemporary structure of shariah supervisory boards in banks have to move towards a more aggressive compliance mode to ensure Islamic banks meet the regulatory requirements fully for all processes involved in providing shariah compliant products and services, since the industry has been in operation for more than five decades. The rapid growth of Islamic finance in recent years; something similar to other new financial products in historical times; has attracted many financial institutions, who are taking a keen interest in this growth sector.

Although Islam was introduced to South East Asia through traders in the 12th century and gained wide acceptance throughout the region in the 14th and 15th centruries (McDonnel, 1986; Ishak & Abdullah, 2012), the earliest hajj undertakings began only in 1849 (Baharudin, 2014). At that time, Malaysia then Malaya was a British colony. However, under the Pangkor Treaty of 1874, the British pledged that they would not interfere in the religion, customs and traditions of the Malays (Baharudin, 2014).