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Concept of islamic finance
Islamic capital market abstract
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It is in no doubt that the Islamic finance and banking sectors have grown into a significant market that played a great role and emphasis in the worldwide financial industry. As a matter of fact, the Islamic finance industry presented and showed a stellar development and growth in terms of figures (Hancock, 2013), as Islamic finance is maturing at 10 to 15 percent annually, and there is no indication that such inclination is to decelerate in the future (Afshar, 2013). Furthermore, Islamic banking is known as a key contributor in the Islamic finance total assets in terms of its market share, which is of about 80.3% (Mubasher.info, 2013). Having to consider such progressive trend of the Islamic Finance and banking sectors in the global finance system, one mechanism or facet of Islamic financial system that strikes the most to be of great importance and is continuously embraced by the Islamic financial practitioners is the issuance of Sukuk or the so-called Islamic bonds.
In light with this, the research paper will provide a comprehensive report on the overall concept of Sukuk. In particular, the following sections of this research paper will elucidate and explain different aspects of the Islamic finance as well as practices and ideologies governing the concept of Sukuk. To start, it will provide an overview of the Islamic finance including its most important features. It will follow a thorough discussion on what really is a Sukuk or Islamic bonds, through presenting review of literatures involving its history, its two types, its seven key structures, issues and risks in Sukuk market, and its measurement and disclosure mechanisms as well. Further, the research paper also provides review on the pricing and issuance mechanism...
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...Zakat. Zakat is a core instrument for redistribution of wealth. In such case, all Islamic banks and financial institutions should generate Zakat funds that will be further distributed to the poor communities and households. They could do this through giving the fund directly to the recipients or through handing it down to any legal religious institutions (Algaoud & Lewis, 2007, pp. 40-41). Lastly, Islamic banks and financial institutions should create a religious supervisory board in order to guarantee that the practices and activities of these institutions comply with the Islamic ethics. This particular Shari’a board is composed of Muslim jurists who serve as Shari’a auditors and advisers to these banks. They also carry out responsibilities of selecting new contracts as well as assessing current contracts and endorsing and supporting new product developments
Also, the usage of high yield bonds securities for financing became popular during the 1990s in foreign markets such as Latin America, Asia, and Europe showing the rise in international appeal for these kinds of securities. However, outside of the U.S the high yield market has taken a longer time to become popular and thus there is still room for the development of high yield bonds within financial markets in emerging countries. It is safe to determine that the market for high-yield bonds will always be in existence since it is a viable alternative for many fast growing firms to acquire financing and is a rewarding option for investors. The key to the still growing, strong market demand for high yield bonds is based on linking the [U.S.] economy’s constant desire for capital with investors’ desire for higher returns on their investment.
The data provided by the Near East Bank for the purposes of this study not only included 10 years of data (2004-2013) but also rendered all figures in 2013 USD. To facilitate calculation, these figures were then rendered into millions of USD. For reasons of privacy, the Near East Bank did not send identified data, as private banks in TRNC are not obligated to disclose their financial data to any party other than the Central Bank of TRNC itself.
Ritter, Lawrence R., Silber, William L., Udell, Gregory F. 2000, Money, banking, and Financial Markets, 10th edn, USA.
Encouragingly Jordan’s banking sector managed to weather the crisis better than other sector of the economy, and other banking sector in different countries. This was mainly supported by rather conservative policies and tight regulations. For instance banks in this country are pure universal. This implies there is no pure investment bank that relies entirely on investment income, a factor that majo...
Lastly, in term of services and management of the Islamic institutions. The Islamic needs to have a training process for all theirs staff who works under the Islamic institutions. They needs to provide a huge knowledge of Islamic and important of Islamic financing to our life. From this, it would increase the awareness of Islamic finance. The workers also can deal with their customers or investors more effectively and effeciently when it goes to the Islamic financing. It also would create customers loyalty on their products and services. The information also would spread accordingly based on the shariah principles.
Saudi Arabia’s capital market is considered to be young compared to other financial markets in the region. Saudi financial markets have been developing slowly because most enterprises in the country are either government owned or family-owned, most of which was funded through state budget, and as a result reduced the need for financing. In the recent past, Saudi Arabia has focused on a careful measurement for structural developments and regulatory changes. However, different phases of historical development of the capital market which can be classified into three phases; pre-industrialization phase, post industrialization phase and growth phase that sparked changes and shaped the kingdom 's capital market on
The paper is divided into two main parts. The first part contains analysis of the historical data about interest rates, exchange rates, and 3-month T-bills (Kazakhstani name: MEKKAM) in two countries: Kazakhstan and USA. The second part gives implications based on the res...
International finance has two basic parts: integration and technical change. These basic forces have shaped the evolution of international finance for centuries. “Global integration of money and capital markets is an important part of international finance; through such channels purchasing power over real resources today is transferred from areas of the world where expected rates of r...
4. Conventional banking does not deal with Zakat (obligation payment). 4. Islamic banking has become one of the services-oriented functions of the Islamic banks to be a Zakat Collection Center and they also pay out their Zakat.
...ofit. Hence, in terms of risk management Islamic banks are more reliable. In addition, with the increasing population of Muslims all over the world, and the recent economic theories proving Islamic banks’ advantages over traditional banks especially during hard times, I believe that new financial system that are based on Islamic principles will play a very important role in the near future.
As such, the nature and characteristics of risks that Islamic banks are exposed to should be different from conventional banks. IFIs have come up with various structures as Islamic versions of hedging instruments to minimize the risk of market fluctuation including foreign currency exchange rate risk and other market risk. (Saadiah Mohamad, 2014)
Our group have been assinged to discuss on the topic above but in Islamic Banking perspectives. Therefore, before going any further, let us clarify definition of the Principles of Islamic Banking and clarify what are the elements involve in the Principles of Islamic Banking. Beside, we will also do some comparison of product or services offered by both banks which are conventional and Islamic banking. Apart from that, we will also clarify the problems or challenge faced by the agency which practices the Islamic banking in their agency.
Stock exchange may also provide facilities for issuance and redemption of securities and other financial instruments. Stock exchange has been known to be the one-stop gateway to the knowledge of basic financial concepts and important in building financially proficient students who become great entrepreneurs of tomorrow. The Nigerian Stock Exchange, founded in 1960 has been known to shape lives and serve as a form of profit-yielding savings to the masses and a way of securing people’s future. An increasing number of people are now buying securities to secure their future. However, with the recent downturn of economy globally and a snowballing number of businesses folding-up and economies collapsing, there has been increasing need for the knowledge of patterns and trends going on in the stock market which is a form of litmus test of the economy of a nation. Hence, a need for financial education so as to ensure the consistent churning out of students who fully understand these trends and adjust to them promptly, allowing them to weather the storm of the economic downturn and rise from its ashes. Having 188 active companies and 61 bonds, the Nigerian Stock Exchange is the
Sources of finance are the different methods for a business to earn and obtain money. There are lots of ways to obtain money but two large basic sources of finance, which are the “owner’s capital” and “capital borrowed”. They are also called internal sources of finance and external sources of finance. In those sources, they are mainly divided in two groups, which are short-term sources of finance and long-term sources of finance.
Bonds have a number of characteristics that differentiate one issue from another. We are going to define and describe a number of characteristics in detail below.