Search results

The most prominent and persistent problems of our global monetary system are instability and imbalances. We propose an international monetary model to solve these problems while at the same time move the model closer to Maqāṣid Sharīʿah (objectives of Sharīʿah). We name this an organic global monetary model or abbreviated as OGM. OGM is an international monetary model directly built on the national monetary system of each member country so that the two can co-exist.

Model design, theory and literature.

The model can eliminate interest rates at the central bank level, create non-tradable international money, and make a more stable international monetary system.

Original.

Drawing upon underinvestment theory and clientele effect hypothesis, this paper aims to examine the effects of foreign currency (forex) exposure and Shari’ah-compliant status on firms’ financial hedging strategy.

Based on data of 250 nonfinancial firms listed on Bursa Malaysia from 2010 to 2018 (2,250 firm-year observations), the authors test the impact of forex exposure based on a vector of foreign-denominated cash flows (FCF) indicators and firms’ Sharīʿah-compliant status on two proxies of financial hedging decisions, namely, the ratio of the notional value of currency derivatives to total assets and a binomial measure of hedging status. The hedging decision models are estimated using panel logistic regression and system generalized method of moments.

The results indicate significant positive effects of the forex exposure indicators on firms’ propensity to hedge. However, the impact of forex exposure is most prevalent via total FCF. The results also reveal significant positive effects of Sharīʿah-compliant status on firms’ propensity to hedge but its negative impacts on the value of currency derivatives they use. The results suggest that Sharīʿah-compliant firms refrain from engaging in currency derivatives to avoid riba’ and subsequently subdue the clientele effect. However, when the forex exposure reaches higher levels, engagement in currency derivatives becomes a matter of tentative necessity (dharurat).

This study relies exclusively on the disclosure of foreign currency risk and management data in the annual reports of listed companies. Consequently, this limits the sample size to only those nonfinancial listed companies with complete data for the study period. Also, since none of the companies reports using Sharīʿah-compliant derivatives, the authors thus assume that they use derivative instruments that tolerate “riba.”

Given the significance of forex exposure on hedging decisions, the accounting profession must strictly adopt FRS 7 and FRS 139 for all listed firms to avoid market scrutiny and sustain their clientele. The results also call for the Islamic market regulators to include mandatory disclosure of conventional currency derivatives in screening firms for clearly prohibited activities to help enhance the credibility of its Islamic financial market.

Due to difficulty accessing relevant cash flow data, the study is among the few studies that measure forex exposure using FCF and test more proxy indicators. This study is perhaps the first to examine the Shari’ah perspective on currency derivatives in corporate forex risk management.

The innovation of cryptography technique and blockchain has made cryptocurrency an alternative medium of exchange due to its safety, transparency and cost effectiveness. But its main feature cannot be separated from the users who use cryptocurrency for their illegal transactions. There are several arguments related to the legality of cryptocurrency. The purpose of this paper is to analyze the nature of cryptocurrency based on characteristics of money, legal perspective, economic perspective and Sharia perspective.

In this study, the methodology used is descriptive with a qualitative approach. The object of this research is cryptocurrency. The data are secondary data obtained from peer-reviewed journal articles, conference papers review, working paper and Sharia consultant reports addressing the legality of cryptocurrency. The literature review analysis includes the following steps: material collection, descriptive analysis, discussion with people in Sharia competency and intuitive-subjective material evaluation.

Regarding the characteristic of money, cryptocurrency is acceptable. But in terms of the legal perspectives, cryptocurrency does not meet the criteria as currency. From the economic perspective, cryptocurrency does not fully meet the characteristic currency due to high price volatility, and from the Sharia perspective, cryptocurrency can be considered property (mal) but not as a monetary value (thamanniyah).

The research findings are based on the journal articles, working paper and Sharia consultant report, and it may lack Sharia’s opinion. Any further discussion related to Sharia perspectives will be a great input to enrich the study.

This study also includes the implications related to the opportunities and the risks of cryptocurrency that can be discussed for the development of the cryptocurrency in the future.

This study includes the implication cryptocurrency is using as nature of money and not as speculative instrument.

This study argued the legality of cryptocurrency in four perspectives such as the nature of money, legal, economy and Sharia perspective.

The study was done to review the existing literature available on the theme using a popular technique known as a bibliometric review. The purpose was to explore important bibliometric trends such as geographical distribution of research; the most relevant countries and institutions and important collaboration networks, frequently published authors, the most relevant topics/research domains and relationships among these, average citations or per year, the most relevant sources, top authors’ production, authors’ impact by H index and the progression of important keywords over a period of time.

The study analyzed literature published in the English language from 2012 onwards that used the words “cryptocurrency”, “Ethereum” “Bitcoin” along with “investment/s” or “speculation/s” in the Title/ABS/KEY. A specialized approach was followed to retrieve and analyze focused research. The data for analysis was extracted from the Scopus database and was analyzed using Biblioshiny and VOSViewer.

The study found that the countries such as the UK, Australia, China and the USA have special relevance in terms of the number of citations and collaboration networks. Cryptocurrency/Cryptocurrencies, bitcoin have been the base themes along with other crucial issues such as volatility, hedging, COVID-19 pandemic, Ethereum, blockchain, co-integration, portfolio diversification/optimization, spillover, safe haven, investor attention, gold, etc. There is a lot of interdisciplinary research on the theme.

The current study used a concentrated approach to study the bibliometric literature about the financial implications of cryptocurrency as an asset class and not prominently its technological or legal aspects.

The objective of this study is to examine the nature of cryptocurrencies, risks involved in using it due to its volatile nature, advantages, disadvantages and its functions as money.

This is an inductive approach to a descriptive analysis (Qualitative research). In order to come to an adequate conclusion, we reviewed several studies and articles previously published in this field related to our research questions, and then explored the nature of Cryptocurrencies, their advantages and disadvantages, risks associated with cryptocurrency usage and their user-friendliness in Saudi Arabia.

The findings of this study reveal that anonymity and concealment are important aspects of cryptocurrencies. This system does not follow a transparent process that can make it parallel to conventional fiat currency.

Although this study focuses on the issue of trust, it fails to recognize more technological factors hampering its transaction mechanism instead of enhancing it, owing to a lack of facts and knowledge.

Like conventional transaction system users must sign their crypto transactions that others must duly verify easily. Once a promise is made, one will not be able to back out of it until it is protected from revocation by the signer.

In comparison with reviewed literature, this study focuses more on the issue of volatility, which accounts for the fact that cryptocurrency has not been accepted as a permanent tool of monetary policy. Additionally, the study finds that the Saudi public is largely pessimistic toward such currencies.

The encrypted money market has attracted the attention of investors all over the world. Among the encrypted currency, bitcoin is undoubtedly the most popular. Because blockchain technology is the crucial support of bitcoin, exploring the relationship between bitcoin and the blockchain index is necessary.

This paper uses the Granger causality test to explore the correlation between bitcoin and the blockchain index. Furthermore, their volatility is analyzed by a GARCH-class model.

The results show that no significant correlation exists between bitcoin and the blockchain index; external shocks aggravate the volatility of bitcoin and the blockchain index, and the volatility has a certain degree of sustainability; and blockchain index has obvious leverage, namely, its decline has a stronger impact.

The volatility of bitcoin and the blockchain index is crucial for investors.

The world currency is endowed with two inherent contradictions, namely, the general contradiction of all currencies and the special contradiction between the quality and quantity of the world currency. The paper aims to discuss these issues.

In the wake of the Second World War, the USA, with its strong economic and military strength, established an international monetary system centered on the US dollar (USD). This gave USD the status of “world currency” and bounded it to the US imperialist hegemony with mutual integration and interaction, making it possible for USD capital to conduct international exploitation and wealth plundering extensively around the world.

The contradiction between the capital logic and the power logic, which is inherent in capital accumulation models of the new imperialism, also indicates the inevitable decline of USD.

This constitutes an important feature of the new imperialism. However, as a sovereign currency, USD has inextricable and inherent contradictions while exercising its function as the world currency.

The authors explore the relationship between the exchange rate, bond yield and the stock market as well as the effect of capital market dynamics on the exchange rate before and during the COVID-19 pandemic.

The authors employ a non-linear autoregressive distributed lag (NARDL) methodology using daily data of the Indonesian economy over the period 2012–2021.

Whilst, over the full sample period, the authors find no cointegration between the exchange rate, the 10-year bond yield and stock market, for the COVID-19 period, evidence of cointegration is present. Furthermore, the results suggest that asymmetric effects are evident both in the short as well as the long run.

To the best of the authors’ knowledge, this is the first time that the relationship between the exchange rate, bond yield and the stock market as well as the effect of capital market dynamics on the exchange rate before and during the COVID-19 pandemic has been explored in the case of the Indonesian economy.

This study examines the impact of hedging on firm value of Sharīʿah compliant firms (SCFs) in a non-linear framework.

This study employs the system-GMM for dynamic panel data to examine the influence of derivatives usage on firm value (Tobin's Q, ROA and ROE). The sample comprised of 59 non-financial SCFs engaged in derivatives from 2000 to 2017 (18 years). The Sasabuchi-Lind-Mehlum (SLM) test for U-shaped is performed to confirm the existence of the non-linear relationship.

This study concludes that hedging significantly contributes to firm value of SCFs based on the non-linear framework. This study suggests that, first, the non-linear relationship occurs due to the different degree of derivatives usage and risk. Second, firms practice selective hedging to maintain the upside potential of firm value.

This study has important implications. First, the importance of risk management via derivatives to increase firm value, second, the evidence of selective hedging from the non-linear relationship between derivatives and firm value and third, the need for quality reporting on derivatives engagement by firms in line with the required accounting standard on derivatives.

This study fills the gap in the literature in relation to the risk management strategies of SCFs in three aspects. First, re-examines the relationship using recent data. Second, examines the relationship in the non-linear framework as the limited studies found in the literature on Malaysian firms are only based on linear relationship. Third, determines whether hedging undertaken by firms is optimal as this can only be addressed using the non-linear framework. This study is robust to the various definitions of firm value (Tobin's Q, ROA and ROE) and non-linear methodologies.

The purpose of this paper is to examine, in a global perspective, the oil, gold, US dollar and stock prices interdependencies and to identify instantaneously direct and indirect linkages among them.

A methodology based on simultaneous equations system was used to identify direct and indirect linkages for the period 1995-2015. The authors try initially to find theoretical answers to main question of the study by discussing causal bilateral relationships while focusing on multilateral interactions.

The results show significant interactions between all markets. The authors found a negative relation between oil and stock prices but oil price is significantly and positively affected by gold and USD. Oil price is also affected by oil futures prices and by Chinese oil gross imports. Gold rate is concerned by changes in oil, USD and stock markets. The US dollar is negatively affected by stock market and significantly by oil and gold price. Indirect effects always exist which confirm the presence of global interdependencies and involve the financialization process of commodity markets.

Motivation of this research paper is the substantial implications of price movements on real economy and financial markets. Understanding that co-movement has great value for investors, policy makers and portfolio managers. This paper differs from previous studies in several aspects. First, most of the research papers focus on bilateral linkages solely, while the authors’ investigation was implemented on all the four markets simultaneously. Second, the study was developed in a global framework using international data. The global analysis allows avoiding country specific effects.