Strong Structure: The Islamic Financial System and Lessons of the Recent Crisis

Over the past few decades, a consensus has emerged that expansion of credit and debt is detrimental to the stability of developing economies... Read More

The Need for Global Perestroika: Islamic Market Index Performance

Regarding the performance of the Dow Jones Islamic Markets (DJIM) Indexes, 2009 was clearly the year of the emerging markets. The DJIM Indonesia Index advanced 133% in 2009 and ended at 1196.90 points (as of the close of trading on Dec. 22). The biggest Islamic nation in the world (with 240 million inhabitants) was followed by the DJIM BRIC Index (Brazil, Russia, India, China)... Read More

Uncertain Diagnosis: US Shari'ah Equity Portfolios and The Health Care Sector

Due to the restrictions placed on Shari'ah compliant portfolios, some sectors such as financials are taken out completely and others such as energy and the health care sectors are over-weighted versus conventional indexes.... Read More

Keeping Pace: Islamic Banks and Stress Testing

A wake-up call has been raised by the current crisis, mainly in countries offering both conventional and Islamic forms of banking. These countries have had to tackle two issues. First, managing the crisis, which has largely affected conventional banks, and second, attempting to gauge the impact of the crisis on the Islamic sector... Read More

Sound Fundamentals: Interview with Ahsan Ali

Ahsan Ali is the Director −__ Credit for the Khalifa Fund for Enterprises Development, a sovereign fund focused on SME development in the UAE. His work experience of over 12 years in banking spans across eight countries and multiple disciplines, with areas of interest including economic development, risk management, Islamic banking and SME development.... Read More

The Leading Edge: The Role of Sukuk In Islamic Capital Markets.

Islamic capital markets are made up of two components, stock markets and bond markets. This contribution is primarily concerned with the latter rather than Shari'ahcompliant stock determination. In particular, it is sukuk that have become the accepted Islamic alternative to conventional bills, bonds, and notes, and hence are the major focus here.... Read More

By the Rules: Islams Foundations for Economy and Finance

The institutional framework of the ideal economy is composed of a collection of institutions - rules of conduct and their enforcement characteristics - to deal with allocation of resources, production and exchange of goods and services, and distribution/redistribution of resulting income and wealth.... Read More

First Steps: Islamic Finance in Russia

Due to the current financial crisis, investors and the general public have little confidence in conventional finance and are willing to consider alternatives, one of which is Islamic finance. The Islamic world is currently seen as a major source of capital, and many in the finance world would like to get access to this capital.... Read More

Ready to Grow: Potential of the German Market for Islamic Finance

Last October, the German Federal Financial Supervisory Authority (BaFin) hosted a conference on Islamic finance in Frankfurt which was attended by Islamic finance experts from countries all over the world as well as interested German stakeholders. The president of BaFin, Jochen Sanio, welcomed the Islamic finance sector to Germany.... Read More

Markets on Markets: Gold, the US Dollar, Inflation, Crude and Commodities

In our previous article Black Gold, which appeared in the May 2009 issue of Business Islamica, we explained the norm reverting process of crude oil around the precious metals. In February, crude was trading at an average price of $39, and now averages $77. Gold neared $1000 per ounce during the crisis in 2008, but retreated, settled and traded around $750 for several months until mid-2009... Read More

Wild Ride: Islamic Finance Markets Could Still Surprise in Remainder of 2009

According to the theory of behavioural finance, human beings do not invest as rationally as they intend to do. Behavioural finance also deals with the phenomenon of selective perception, meaning, for example, that once we buy a stock, we tend to look at mostly good news related to the share, rather than taking the downside-risk into account.... Read More

Financial Powerhouse: Growing Influence of Women Creates Opportunity for Islamic Banks

Throughout the Muslim world, banks and financial institutions have experienced a significant rise in the number of female customers in recent years. The number of banks and investment companies created specifically for women has skyrocketed across the Middle East. Estimated to control around $246 billion of the regions wealth (projected to hit $383 billion by 2011), women in the Middle East... Read More

Islamic Finance 101: Istisnaa Offers Flexibility for Financing

In its most basic form, istisna'a is a contract used to procure the manufacture of a good which does not already exist and which can be specified in detail −__ one which is relatively unique. Istisna'a is flexible with regards to the payment to the manufacturer, which makes it useful as a financing tool. The use of istisna'a as a way to structure financing is done with parallel istisna'a... Read More

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