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1 – 10 of over 9000Alam Asadov, Ikhtiyorjon Turaboev and Ramazan Yildirim
Despite its potential as an emerging market for Islamic financial services, Uzbekistan has lagged in legislative support. This study aims to evaluate the feasibility of…
Abstract
Purpose
Despite its potential as an emerging market for Islamic financial services, Uzbekistan has lagged in legislative support. This study aims to evaluate the feasibility of introducing an Islamic capital market (ICM) in Uzbekistan, preceding a broader industry establishment.
Design/methodology/approach
The authors begin by assessing Islamic finance literacy and the potential demand for ICMs in Uzbekistan. The authors then scrutinize Uzbekistan’s capital market legislation and its readiness. This analysis uses primary data, including surveys and interviews, and secondary data from literature and financial legislation.
Findings
This study highlights a significant demand for ICMs, despite low Islamic finance awareness in Uzbekistan. Presently, Uzbekistan’s capital market development is lacking, with regulations not yet suitable for ICMs. As a result, legal and operational enhancements are needed.
Practical implications
The authors provide essential policy recommendations for authorities and practitioners to facilitate the effective launch of ICMs and enhance Uzbekistan’s capital market stature.
Originality/value
To the best of the authors’ knowledge, this is the first study offering an in-depth analysis of the potential and feasibility of ICMs in Uzbekistan.
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Rizaldi Yusfiarto, Septy Setia Nugraha, Lu’liyatul Mutmainah, Izra Berakon, Sunarsih Sunarsih and Achmad Nurdany
This study aims to explore the Islamic capital market adoption model, based on the construct of Islamic financial literacy (IFL), the theory of planned behavior (TPB) and past…
Abstract
Purpose
This study aims to explore the Islamic capital market adoption model, based on the construct of Islamic financial literacy (IFL), the theory of planned behavior (TPB) and past behavior (PBR) in the context of a Muslim-majority country (Indonesia).
Design/methodology/approach
To test the conceptual model, this study used data from 251 respondents with a diverse spectrum, and the partial least squares structural equation modeling technique was used to test the forecasting of the model.
Findings
Overall, IFL and TPB dimensions (i.e. attitudes and perceived behavioral control) have a significant positive effect, either directly or indirectly, for investment intentions in the Islamic capital market. Also, the findings recommend the construct of PBR as an important predictor of investment intentions in Islamic capital markets.
Practical implications
The study can be beneficially used for Islamic financial institutions to participate with the Indonesian government in affirming IFL to broader society, not only Islamic education institutions. It is related to the significance of IFL, where it can be utilized as an indicator that education on the concept and values of Islamic finance can positively establish attitudes in society and stakeholders.
Originality/value
This study is an effort to strengthen IFL as a key construct using a good measurement scale, in the context of the Islamic capital market investment. In addition, this study also provides the necessary impetus to analyze the relationship between the dimensions of TPB and PBR, either directly or indirectly.
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It is said that to establish an Islamic Capital Market, the first step would be to have a strong Islamic finance industry with numerous institutions offering Islamic financial…
Abstract
Purpose
It is said that to establish an Islamic Capital Market, the first step would be to have a strong Islamic finance industry with numerous institutions offering Islamic financial services. This way it is easy to know that the demand for Islamic capital market would be there and that market will be sophisticated enough to comprehensive the nature of shariah compliant products. Generally, in most of the jurisdictions, this is how the Islamic capital market is created. The purpose of this paper is to understand the establishment of Islamic capital market in Maldives, small island nation where the establishment of Islamic capital market happened when at a time there was only one takaful company and one Islamic bank established.
Design/methodology/approach
This paper is a legal exploratory research that is based on the review of primary and secondary data available on the subject matter.
Findings
It is anticipated that this paper will provide assistance and inspiration to those jurisdictions that aims to create Islamic capital market from scratch.
Originality/value
It shall be noted that there are no literature available on this subject about Maldives, and as such, this paper can be starting point to preserve knowledge in this area.
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Ibnu Qizam, Misnen Ardiansyah and Abdul Qoyum
The purpose of this study is to investigate the nature and integration of Islamic stock markets across the Association of Southeast Asian Nations (ASEAN-5) countries for economic…
Abstract
Purpose
The purpose of this study is to investigate the nature and integration of Islamic stock markets across the Association of Southeast Asian Nations (ASEAN-5) countries for economic community (AEC) development.
Design/methodology/approach
Using samples of daily closing prices from 2009 to 2014 across ASEAN-5 countries, co-integration and Granger-causality tests were applied.
Findings
This research finds that Islamic capital markets across ASEAN-5 countries remain highly integrated despite the global financial crisis of 2008, and it also finds the integration strength between Jakarta Islamic Index -Indonesia and Bursa Malaysia Emas Sharia-Malaysia Islamic capital markets to be the most influential across ASEAN-5 countries, while MSCI-Philippine Islamic capital market is the most vulnerable across ASEAN-5 Islamic capital markets.
Research limitations/implications
The overwhelming benefit of Islamic stock market integration across ASEAN-5 countries, and, even in a broader context, awaits further inquiry.
Originality/value
Islamic capital markets across ASEAN-5 countries are integrated regardless of the post-global financial crisis. This contributes to confirming cross-border integration policies, especially for AEC development.
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A theoretical methodology premised on the epistemology of divine unity as the world view of all Islamic socio‐scientific inquiry, is introduced. This general theory based on the…
Abstract
A theoretical methodology premised on the epistemology of divine unity as the world view of all Islamic socio‐scientific inquiry, is introduced. This general theory based on the knowledge‐centred interactive, integrative and evolutionary process of social becoming is next formulated for the specific case of capital markets. The methodology premised on unity and unification of knowledge is shown to be a universal application interconnecting science and society through a process‐oriented knowledge‐centred model. Finally, the generalized theoretical methodology and its specification to the case of Islamic capital market is used to critically evaluate Malaysia’s Islamization program, specially during the heady days of her stock market and currency turmoils. Alternative policy recommendations are provided for a newer outlook on Malaysian development and capital market Islamization programs. A general inference is thus derived and conveyed to the field of capital market stability arising from a direct linkage between real sectoral activities and endogenous money as store of value of real transactions. The approach of this paper being epistemological in nature, it undertakes a fundamental look at Qur’an and Sunnah for developing shari’ah‐rules (Islamic law), i.e. ahkam as‐shari’ah (rules derived from shari’ah), in the area of socio‐scientific inquiry in general and Islamic capital market in particular.
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Mohammed El Hadi El Maknouzi and Iyad Mohammad Jadalhaq
This paper aims to survey the screening practices and regulatory arrangements that can be gleaned from the experience of Islamic financial indices on international stock markets…
Abstract
Purpose
This paper aims to survey the screening practices and regulatory arrangements that can be gleaned from the experience of Islamic financial indices on international stock markets. Such indices can be regarded as experiments in the demarcation of “pockets” of Sharī‘ah-compliant securities exchange, in the context of non-Sharī‘ah-compliant stock markets. They offer valuable regulatory precedent, with a view to the development of a transnational domain of Islamic financial transactions.
Design/methodology/approach
The paper leverages the experience of Islamic financial indices for charting the fault lines between the foundational principles of Islamic finance, and those of interest-based investment commonly accepted on international financial markets. It subsequently reviews the most salient regulatory arrangements in place for discriminating between permissible and forbidden securities and modes of trading, as implemented on Islamic financial indices. These include selection criteria for index inclusion, and Sharī‘ah committees with ex ante and ex post supervisory duties.
Findings
The paper makes a case for viewing Islamic finance indices on international capital markets as capacity-building experiments for the regulation of transnational Islamic financial flows.
Originality/value
The study rejuvenates the pragmatic approach towards the development of Islamic capital markets, by suggesting that incremental organisational innovations, as developed in connection with Islamic financial indices, can build institutional capacity towards an economy that abides by Islamic values.
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Adam Ng, Mansor Ibrahim and Abbas Mirakhor
The purpose of this paper is to set forth seven broad recommendations and 15 specific initiatives within a four-dimensional framework for the development of social capital in…
Abstract
Purpose
The purpose of this paper is to set forth seven broad recommendations and 15 specific initiatives within a four-dimensional framework for the development of social capital in Islamic finance, particularly the stock market, given its role as the first best means of risk sharing.
Design/methodology/approach
The four-dimensional framework comprises dimensions of principle and value, trust-reinforcing regulation, investment opportunity and infrastructure, as well as reputational intermediaries.
Findings
A web of multi-pronged initiatives that are mutually reinforcing is proposed considering the multifaceted dimensions of social capital and the various possible transmission channels by which social capital can influence the financial system.
Practical implications
While empirical studies have demonstrated the importance of trust and ethics in financial development, the pressing issue remains how social capital, including trust and ethics, can be developed to achieve a trustworthy, ethical and efficient financial system. This paper attempts to address this concern.
Originality/value
This paper provides a framework for building social capital in Islamic finance.
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Andreas Jobst, Peter Kunzel, Paul Mills and Amadou Sy
The most popular form of Islamic finance is commonly referred to as sukuk – wholesale, asset‐based capital market securities. The purpose of this paper is to enhance the general…
Abstract
Purpose
The most popular form of Islamic finance is commonly referred to as sukuk – wholesale, asset‐based capital market securities. The purpose of this paper is to enhance the general understanding of essential policy considerations in the creation and development of sukuk markets.
Design/methodology/approach
This policy paper reviews the key developments in the sukuk market and informs a debate about challenges and opportunities going forward. The paper presents a qualitative analysis of economic, regulatory and legal issues that warrant consideration.
Findings
The paper finds that while the sukuk market continues to generate strong interest by new issuers in Muslim and non‐Muslim countries alike, some critical constraints arising from continued legal uncertainty and regulatory divergences still need to be overcome. As issuers weigh the costs and benefits of sukuk issuance in a broad policy context, continued efforts will be required to overcome a series of economic, legal and regulatory issues.
Originality/value
The paper presents, for the first time, a structured analysis of sukuk markets aimed at identifying key considerations for sovereign debt managers, especially in non‐Muslim countries.
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Mohammed Ayoub Ledhem and Mohammed Mekidiche
This paper aims to investigate empirically whether Islamic securities enhance economic growth in the Southeast Asian region based on the endogenous growth theory using the…
Abstract
Purpose
This paper aims to investigate empirically whether Islamic securities enhance economic growth in the Southeast Asian region based on the endogenous growth theory using the non-parametric analysis.
Design/methodology/approach
This paper applies panel quantile regression with Markov chain Monte Carlo optimization as an optimal non-parametric approach to investigate the effect of Islamic securities on economic growth starting from 2013Q4 to 2019Q4 in Southeast Asia. Total issued Islamic securities holdings are employed as a measure for Islamic securities, while the gross domestic product is employed as a proxy for economic growth. The sample includes all working Islamic financial foundations in the top progressive Islamic securities markets' countries of Southeast Asia (Malaysia, Indonesia and Brunei Darussalam).
Findings
The findings confirm that the increase of issuing Islamic securities in Islamic capital markets of Southeast Asia is increasing the levels of economic growth, reflecting the weighty role of the Islamic capital market development as an active contributor to economic growth.
Practical implications
This research would fill the literature gap by exploring Islamic securities–economic growth nexus in Southeast Asia using a robust non-parametric approach based on the endogenous growth theory for better estimation results. The findings of this review serve as a roadmap for financial analysts, policymakers and decision makers to stimulate the Islamic securities markets as another source of finance which can promote the economic growth.
Originality/value
This research is the first that investigates empirically the Islamic securities–economic growth nexus in Southeast Asia using a new empirical investigation built on the non-parametric analysis and outlined within the theoretical context of the endogenous growth model to gain robust evidence about this nexus.
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This study aims to define the parameters of the reward-risk principle in Islamic finance as established in the literature and discuss propositions that are presented on how such a…
Abstract
Purpose
This study aims to define the parameters of the reward-risk principle in Islamic finance as established in the literature and discuss propositions that are presented on how such a principle is to be applied to Islamic banking products.
Design/methodology/approach
A descriptive approach is used to explore the normative parameters and criticisms of the application of reward-risk in Islamic finance.
Findings
The study finds that the principle of reward-risk is embodied in the multi-component concept of ʿiwaḍ (counter value) which must be evident in market transactions that involve commercial exchanges. The components include risk, costs, effort, value-adding and capital, all of which apply uniquely to different contractual forms of financing.
Research limitations/implications
The study uses academic literature and industry documents along with modest contact with prominent practitioners who provided general feedback on prevalent Islamic finance industry practices.
Practical implications
This study exposits the variety of approaches in applying the reward-risk principle and sheds light on the primary elements of the principle which will facilitate its greater consideration by the Islamic finance industry.
Originality/value
This study is a meaningful attempt at conveniently summing up and applying the parameters that are considered when discussing the scope of the reward-risk principle in Islamic finance.
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