In this study we were motivated to ascertain whether the profit rates of the investment deposit accounts based on the profit and loss sharing contracts offered by the Islamic banks are truly based on the performance of the underlying assets or otherwise, by taking Malaysia as our case study....

Traditionally, the main role of the bank is to offer loans to its customers, to facilitate the intermediary role in the financial market between the investors and feed the need of the big corporations in terms of investment. This study is an attempt to analyze, at the same time, the impact of...

This paper analyzes the Shariah compliant nature of Islamic banks (IB) by using Time Series Multivariate Forecasting techniques to test the correlation and direction of causality between interest rates and IB financing . Islamic finance defines a 0% Interest rate, both on the asset and on the...

The Islamic bonds or sukuk market is one of the fastest growing segments of the nearly US$2trillion global Islamic finance industry. However, lack of trading in secondary sukuk markets is a peculiar feature in this sector and both institutional and retail sukuk investors are known to adopt a...

Econometricians had been blamed for the financial crises that occurred due to their giving a ‘false hope’ to investors and policy makers using untested theoretical assumptions. Therefore, econometricians had been challenged to reform their studies by grounding them more solidly on reality....

Increasingly Islamic financial institutions are being pressured by critics to offer profit and loss sharing (PLS) financing for the purpose of entrepreneurial development. We believe the growth of PLS can be incentivized by increasing the participation of Islamic asset managers and mutual funds...

Firm-level analysis of the cost of equity is essential for many financial decision makings, capital structure choice, capital budgeting analysis, performance assessment and firm valuation. This study aims to shed some light on the determinants of cost of equity by analyzing Shariah compliant...

Islamic equity portfolios work with a smaller investment universe given the filtering of non-Shari’ah compliant stocks. It has been theoretically argued that this culminates in suboptimal portfolio diversification which in turn adversely affects risk-adjusted returns. We employ a number of...

The paper is the first attempt to evaluate the role of gold as a hedge (negative or low correlation with equities in normal market conditions) and safe haven (negative or low correlation in times of market turbulence) by using the daily data for gold and Shariah-compliant equities ranging from...

This paper investigates the volatility and correlations of stock returns of some crisis-hit countries such as, US, Greece, Thailand and Malaysia during the major global financial crises since 1992. The paper makes an attempt to address the following two issues: Firstly, to measure the extent of...