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11 – 20 of 58Suriani Suriani, M. Shabri Abd. Majid, Raja Masbar, Nazaruddin A. Wahid and Abdul Ghafar Ismail
The purpose of this study is to empirically analyze the role of sukuk in the monetary policy transmission mechanism through the asset price and exchange rate channels in the…
Abstract
Purpose
The purpose of this study is to empirically analyze the role of sukuk in the monetary policy transmission mechanism through the asset price and exchange rate channels in the Indonesian economy.
Design/methodology/approach
Using the monthly data from January 2003 to November 2017, this study uses a multivariate vector error correction model causality framework. To examine the role of sukuk in the monetary policy transmission mechanism through the asset price channel, this study uses the variables of consumption, inflation, interest rates, economic growth and the composite stock price index. Meanwhile, to examine the role of sukuk in the monetary policy transmission mechanism through the exchange rate channel, this study used variables of inflation, interest rates, economic growth, foreign investment and exchange rate.
Findings
This study documented that sukuk has no causal relationship with inflation through asset price and exchange rate channels. Nevertheless, sukuk has a bidirectional causal relationship with economic growth through asset price and exchange rate channels. Sukuk is also documented to have a causal relationship with monetary policy variables of interest rate and stock prices through asset price and exchange rate channels. Finally, a unidirectional causality is recorded running from the exchange rate to sukuk in the exchange rate channel.
Research limitations/implications
The finding of independence of the sukuk market from interest rates provides evidence that the trading of the sukuk in Indonesia has been in harmony with the Islamic tenets.
Practical implications
The relevant Indonesian authorities need to enhance both domestic and global sukuk markets as part of efforts to promote the sustainability of Islamic capital market development in Indonesia.
Originality/value
To the best of the authors’ knowledge, this study is among the first attempts to empirically investigate the role of sukuk in monetary policy transmission through asset price and exchange rate channels in the context of the Indonesian economy.
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Uzir Abdul Malik and Abdul Ghafar Ismail
Development, both economic and social, has been uppermost in the minds of the Malaysian fathers of independence in the process of nation building. Although the nation inherited…
Abstract
Development, both economic and social, has been uppermost in the minds of the Malaysian fathers of independence in the process of nation building. Although the nation inherited the British systems of liberal democracy and capitalism, it also inherited many of the problems it had created earlier among which were a nation divided by race, culture and religion and a society divided by disparities in economic functions, income levels and social standings. Thus the main functions of nation building have since then been that of creating national unity and redressing economic and social disparities.
Abdul Ghafar b. Ismail and Ismail b. Ahmad
Aims to consider the empirical works on Islamic financial design in the light of room for improvements.
Abstract
Purpose
Aims to consider the empirical works on Islamic financial design in the light of room for improvements.
Design/methodology/approach
Looks at the many aspects of the Islamic financial system and suggests some prudent and sound regulatory frameworks which are deemed necessary.
Findings
Finds that the more services that can be offered by the financial intermediaries, the greater the chances of producing more specialized financial services and diversification of financial institutions.
Originality/value
Paves the way for future scholars to examine the systems from the angle of efficiency, effectiveness, rules and regulations, and the present lack of a recognized legal and accounting system.
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Wan Hakimah Wan Ibrahim and Abdul Ghafar Ismail
– The aim of this paper is to discuss the similarities and differences of both conventional and Islamic financial institutions from various institutional perspectives.
Abstract
Purpose
The aim of this paper is to discuss the similarities and differences of both conventional and Islamic financial institutions from various institutional perspectives.
Design/methodology/approach
This conceptual paper describes the insights held by the financial institution theory which is discussed from the perspectives of the economics of the financial institution, legal environment, the political aspect of an institution, the philosophical underpinning, the components of institution and also the ethical role of institution. Then, this paper will proceed to justify the similarities and differences that have been observed between both institutions.
Findings
Discussions in this paper will reveal that specifically specific similarity is prevalent on the nature of the supervisory role. The differences between both institutions from the aspects of business organization, economic roles and law of origin have also been found.
Research limitations/implications
The similarities and differences that are established on both institutions will affect the structure of the financial contract and the design of financial systems.
Originality/value
The paper will contribute a new knowledge specifically on the design of the Islamic financial contract based on Shariah law at the initial phase.
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Salman Ahmed Shaikh, Abdul Ghafar Ismail and Mohd Adib Ismail
Muslim investors must comply with the ethical injunctions prescribed for them while making financial investments. As per Islamic principles, the use of Riba (interest), Maysir…
Abstract
Muslim investors must comply with the ethical injunctions prescribed for them while making financial investments. As per Islamic principles, the use of Riba (interest), Maysir (gambling) and Gharar (uncertain or contingent payoff contracts) is prohibited. This chapter provides some recent post great financial crisis evidence on the comparative performance of Islamic and conventional market indices. Islamic indices outperformed conventional market indices in terms of annualized returns except for emerging markets. In the overall period of 2007-16, it is found that Islamic indices have a lower coefficient of variation and hence higher reward to variability ratio. This suggests that Islamic indices are superior to conventional market indices adjusting for variability in returns. In most comparable Islamic and conventional indices, a strong co-movement and long-term co-integrating relationship is found. The results also highlighted causality running from conventional indices to the Islamic indices in most of the market groups, except for the S&P Global.
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Roza Hazli Zakaria and Abdul Ghafar Ismail
The purpose of this paper is to validate the concern that banks' increasing involvement in securitization activity restrains banks' lending, as well as their degree of risk…
Abstract
Purpose
The purpose of this paper is to validate the concern that banks' increasing involvement in securitization activity restrains banks' lending, as well as their degree of risk tolerance. Theoretical frameworks claim that securitization reduces risk, hence decreasing banks' degree of risk aversion. Subsequently, banks would be motivated to increase their percentage of assets devoted to risky activities, which is lending to economic sectors. However, banking statistics dictates that banks' lending is on the decline while banks' securitization activities are on the rise.
Design/methodology/approach
The paper refers specifically to the Malaysian Islamic commercial banks and utilizes standard panel data analysis.
Findings
Supportive evidence was found that banks' involvement in securitization activity do restrain their lending activity. In addition, banks tend to have a riskier portfolio composition following their involvement in securitization activity. Taken together, this signals that banks' involvement in securitization activity needs to be regulated or restricted since excessive securitization activities could curtail credit and increase risk inherent in banks' lending portfolio.
Originality/value
This study departs from previous literature in the sense that an alternative method is introduced to measure banks' securitization activity.
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Rose Abdullah and Abdul Ghafar Ismail
– This paper aims to study the problems faced by microfinance institutions (MFIs) and relates it with Al-Tawhid to see the solutions.
Abstract
Purpose
This paper aims to study the problems faced by microfinance institutions (MFIs) and relates it with Al-Tawhid to see the solutions.
Design/methodology/approach
An exploratory method was used to examine various literature that discuss MFIs, the challenge issues growing in tandem with the growth of the microfinance sector and the economic order of MFIs and tries to link it to Al-Tawhid.
Findings
The absence of Al-Tawhid concept in the practice of conventional MFIs caused the practices are not acceptable to Muslim micro entrepreneurs. Hence, the use of Al-Tawhid principles of contract suggested practices that are fair and free from elements of riba and gharar. It relates to the economics order by looking into the aims of providing finance up to reaching the consensus process or shuratic. Cash waqf is suggested as a source of fund for Islamic MFI for sustainability.
Research limitations/implications
The findings need to be supported with empirical study to come up with suitable models.
Practical implications
Alternative sustainable source of funds for the Islamic MFI is suggested.
Social implications
Activating the cash waqf will involve the society in large to contribute to the economic development. The beneficiaries, such as the poor and needy, will be able to find a source of living and be actively involved in generating income activities.
Originality/value
This paper highlights the cause of problems faced by conventional microfinance and relats the Al-Tawhid to overcome those problem conceptually.
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Abdul Ghafar Ismail and Nor Zakiah Ahmad
Reports that poverty alleviation is a particular developmental focus in Malaysian plans. Reveals that for this to be attained microenterprises are encouraged, and that the…
Abstract
Reports that poverty alleviation is a particular developmental focus in Malaysian plans. Reveals that for this to be attained microenterprises are encouraged, and that the financing of microenterprises by means of pawnshop loans in small amounts and with low risk is a popular one among the marginal groups. Examines the efficacy of this instrument of microenterprise financing.
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Salman Ahmed Shaikh, Abdul Ghafar Ismail, Mohd Adib Ismail, Shahida Shahimi and Muhammad Hakimi Mohd. Shafiai
This chapter looks at the relationship between governance and economic development in selected Organization of Islamic Cooperation (OIC) member countries. This chapter outlines…
Abstract
This chapter looks at the relationship between governance and economic development in selected Organization of Islamic Cooperation (OIC) member countries. This chapter outlines the concept of good governance in Islamic faith and episteme and provides some empirical evidence on the governance development nexus in the literature. It also describes the state of governance in OIC countries through descriptive statistics on some indicators. It looks at the relationship between governance and economic development. In contrast, it explores the relationship between governance and economic growth. The results highlight the need for reforms in the quality of institutions, establishing rule of law, emphasising on governance in the policy agenda and bringing strong accountability mechanisms.
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Abdul Ghafar Ismail, Bayu Taufiq Possumah and Mohd Najib Abdul Kadir
The aim of this paper is to examine the inter-generational transfer by not only looking at the monetary transfer as discussed by many economists and sociologists but also by…
Abstract
Purpose
The aim of this paper is to examine the inter-generational transfer by not only looking at the monetary transfer as discussed by many economists and sociologists but also by advancing the conceptual discussion and illustrating it with some examples of empirical comparison.
Design/methodology/approach
This paper provides recent theoretical and empirical work on inter-generational transfer from the viewpoint of different systems and compares it to the Islamic view of inheritance.
Findings
One finding of this paper is that the Islamic inheritance system is a socially and economically more comprehensive and broad framework than inter-generational transfers from another system.
Originality/value
This paper is considered as an original approach to the framework of the Quranic basic source and Islamic literature regarding inter-generational transfer compared to another system.
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