New kid in the block: QScience Journal of Contemporary Islamic Studies

QScience Journal of Contemporary Islamic Studies
An interdisciplinary journal covering the following major themes in Islamic studies: Contemporary Islamic jurisprudence; Islamic history and civilization; Comparative religions and modern Islamic thought; Islamic economics and finance, Public policy in Islam.  A Qatar Foundation Academic Journal.

Their first editorial article can be viewed here:
Islamic finance: some aspects of the research and policy nexus
Tariqullah Khan
December 2010

Abstract: "Islamic finance is a dynamic, practical and academic field of contemporary Islamic studies. It is based on the universally shared ethical values of transparency, fairness and justice and operates in conformity with the Shariah in the framework of laws existing in a jurisdiction. During the past 35 years Islamic finance has emerged as a way of financing production, projects and trade and facilitating the required financial intermediation and payments systems. The recent global financial crisis has increased interests in the Islamic finance business model. The focus has been on the products offered by Islamic finance, its architectural foundations, the unique risks of its assets and liabilities and its implications for the inclusiveness and stability of the interconnected financial systems. In the coming years we expect that these interest areas will remain in focus of the academic and policy research works in the field of Islamic finance. This note intends to highlight some of the pertinent themes in the research and policy nexus related to Islamic finance."

New kid in the block: QScience Journal of Contemporary Islamic Studies

When Sukuk Default - Asset Priority of Certificate-holders vis a vis Creditors

When Sukuk Default - Asset Priority of Certificate-holders vis a vis Creditors
Opalesque Islamic Finance Intelligence
By Mohammed Khnifer (MSc,MBA,CIFP)


The research explains how lawyers can structure sukuk that can save certificate-holders from the repercussions of what comes after default. That is Asset Protection of Certificate-holders vis a vis Creditors.

When Sukuk Default - Asset Priority of Certificate-holders vis a vis Creditors

Opalesque Islamic Finance Intelligence - Fifteenth Issue

The fifteenth edition of OIFI is here (download the PDF version) and you might notice our front cover is slightly different. Since inception we have avoided profiling any specific individual or personality, in part to differentiate OIFI with so many other finance publications and because our focus has always been poignant and relevant content (not to mention the fact that such portraits are cheesy too). This edition explores, among other things, the conscience of the industry as we ask ourselves: What is Islamic finance? What is the message being conveyed? Who can be part of this industry? How do we communicate the message more effectively? The front cover illustrates this puzzle (and hints to the answers).

Our Editorial tackles the approach we take not only to define Islamic finance but, increasingly, on how we communicate it to others. On the other end our Featured Resource is a short compilation of materials concerning Islamic Economics, an often distant topic to Islamic finance but one that is undergoing a similar revival and evolution.

The Featured Structure segment has Jhordy Kashoogie analyzing the debate behind the permissibility of trading sukuk, and this is further complemented by the Discussion Board which brings along feedback from practitioners on the same subject. Lex Islamicus welcomes back Hakimah Yacoob as she discusses financial criminology and financial victimology from the perspective of Islamic finance.

The Industry Snapshot introduces a recurring series of articles on EPL in Islamic finance (Education, Perception and Liquidity), which has been developed by Deloitte's Daud Vicary. Lastly the Opinion Column examines the growing concerns regarding career development and deployment of human capital in the industry, with Mohammed Khnifer highlighting some of the main obstacles faced by today's would-be Islamic bankers.

We encourage feedback from our readers and welcome comments & suggestions to make OIFI better. In addition, please remember that you can visit our historical archive (see reference link) for access to our ever-growing databank of Opalesque Islamic Finance Briefing as well as all of the back issues of Opalesque Islamic Finance Intelligence.

Download the complete issue of Opalesque Islamic Finance Intelligence here.

Alternatively you can read each article separately in the OIFI Archive:
Editor’s Note: Islamic Finance Incommunicado
Featured Resource: Islamic Economics
Featured Structure: Shari'a Polemics of Sukuk Trading
Discussion Board: Sukuk Trading - Deviation Between Theory and Practice?
Lex Islamicus: Financial Criminology v Financial Victimology in Islamic Practice
Industry Snapshot: E.P.L. in Islamic Finance - Education
Opinion Column: Voices of the Unheard - Salvaging the Next Generation of Islamic Bankers

Opalesque Islamic Finance Intelligence - Fifteenth Issue

The World Interfaith Harmony Week

The World Interfaith Harmony Week

The World Interfaith Harmony Week is based on the United Nations General Assembly Resolution A/65/PV.34 for a worldwide week of interfaith harmony. It was proposed in 2010 by HM King Abdullah II and HRH Prince Ghazi bin Muhammad of Jordan. The World Interfaith Harmony Week will fall on the first week of February of every year and aims to promote harmony between all people regardless of their faith.

This week of observance might go unnoticed by the Islamic finance industry (letters of support come from all corners of the world, but few if any Islamic banks seemed to be aware of it), however we do hope that this same industry can serve as an example of how people from various faiths, backgrounds and nationalities can find a common ground.  Read more about the World Interfaith Harmony Week on their official website (see reference link).

The World Interfaith Harmony Week

The FTSE Global Islamic and the Risk Dilemma

The FTSE Global Islamic and the Risk Dilemma
Noor Hashim
American International University-Bangladesh, Office of Research and Publications
March 2008


Abstract: "Risk typically represents investments’ double-edged sword. Quantifying the adequate amount of risk to be assumed could be difficult, especially when “too much risk could turn out to be too little.” Under Islamic finance, managing risk is even more challenging. On the one hand, assuming high levels of risk is not encouraged. On the other, Islamic screening rules restrict investment and consequently stimulate risk. This paper considers the above dilemma by examining the effect of adopting screening rules on stock indices risk. The study, conducted using monthly data from FTSE Global Islamic, tests the hypothesis that the Islamic index yields adequate returns for the level of risk undertaken. Results show that the Islamic index surpasses the socially responsible index in performance while operating in line with the market. This risk assessment result does not resolve the dilemma but assures the economic appropriateness of the procedures adopted in managing the Islamic index."

The FTSE Global Islamic and the Risk Dilemma

Analysis of Short-Term Asset Concentration in Islamic Banking

Analysis of Short-Term Asset Concentration in Islamic Banking
Abbas Mirakhor
International Monetary Fund (IMF)
October 1987

Abstract: In general the process of implementation of Islamic banking in the Islamic Republic of Iran and Pakistan appears to be proceeding with relative success. However, number of problems have surfaced during the transition period, among which is a tendency for short-term assets to dominate commercial bank portfolios. The negative effects on capital formation is one result of this portfolio behavior. The cause of this behavior is a set of regulations constraining profit-sharing activities of commercial banks. It is shown here that such regulations rather than reducing the risks of bankruptcies in the banking system may well increase them.

Analysis of Short-Term Asset Concentration in Islamic Banking

Financial Intermediation in Muslim Community - Issues & Problems

Financial Intermediation in Muslim Community - Issues & Problems
Ibrahim S. Alomar
Department of Economics, Qassim University, Saudi Arabia
2005

Abstract: "It is widely known that Muslim society inherited an interest based financial intermediation system from others instead of developing their own banking system. However, Muslim Economists and scholars around the world made efforts to have and develop their own financial intermediation since there was no initial working model to act upon, except the belief that interest-based financial intermediation might be replaced by an Islamic one on the basis of profit and loss sharing. During the last four decades, Islamic financial intermediation industry became a reality that the Muslim society around the world can see and practice. However, the Islamic financial intermediation in the world has been facing numerous problems & challenges. It raises a number of issues and potential problems which can be seen from the macro and micro operational point of view. Developing the Islamic financial intermediation depends on clarifying these issues and presenting them in order to focus on them studying and remedying. This paper aims to cover the ground of issues of Islamic financial intermediation that rose during its short age. Such issues prevent Islamic financial intermediation from its operating with its full efficiency level. Even no attempt to remedy these issues, presenting these issues and problems and classifying them according to their type is very valuable for sustained growth and development of the Islamic financial intermediation. Such work is a valuable contribution to build the Islamic financial intermediation industry on sound theoretical foundations."

Financial Intermediation in Muslim Community - Issues & Problems

The Rise and Fall of Gulf Finance House

The Rise and Fall of Gulf Finance House
Islamic Finance News
By Mohammed Khnifer (MSc,MBA,CIFP)

This paper dissects the balance sheet and business model of Gulf Finance, and scrutinizes the existence of a "pre-exit premium" in their activities - on top of the usual exit fees and/or performance fees. The study suggests that this practice (uncommon even for conventional Private Equity businesses - much less for an Islamic Private Equity house) was pioneered by GFH and it is this same practice that brought them down to their knees.

The Rise and Fall of Gulf Finance House

How it all started: "Birth of the blog"

Recently we were interviewed by Thomson Reuter's Global Head of Islamic Finance, Rushdi Siddiqui, to provide the back story of how the IFR Blog came into existence.  You can read the full feature (entitled "Birth of the Blog") from the December edition of Islamic Business & Finance Magazine with the following link.

We hope that the interview provides insights on how the blog has developed, but most of all on the need to better disseminate information about Islamic finance and reduce the time/costs associated with searching for relevant industry information.


Many thanks to Rushdi Siddiqui for knocking on the IFR door!

How it all started: "Birth of the blog"

Corporate Governance of Islamic Banks, Its Characteristics and Effects on Stakeholders and the Role of Islamic Banks Supervisors

Corporate Governance of Islamic Banks, Its Characteristics and Effects on Stakeholders and the Role of Islamic Banks Supervisors
Doctoral thesis, University of Surrey
Al-Sadah, Anwar Khalifa Ibrahim (2007)

Corporate Governance of Islamic Banks, Its Characteristics and Effects on Stakeholders and the Role of Islamic Banks Supervisors