The first comprehensive guide to Islamic financial markets. Based on the course taught at the International Islamic University Malaysia, this is the first book on Islamic finance to focus exclusively on money and capital markets. Covering basic concepts as well as current practices in Islamic financial markets, the book features case studies from real markets. It outlines the theory of money in terms of value, supply, and demand, while explaining the Islamic capital markets in terms of classifications, types of operations, valuations of securities, Islamic unit trust, ETFs, Islamic stock broking, and much more.
An excellent introduction to money market principles for students in Islamic banking and finance, as well as researchers and current practitioners, Fundamentals of Islamic Money and Capital Markets is a vital resource on the subject.
Key Features
- Written by experts from the International Islamic University Malaysia, the leading organisation in research in Islamic finance.
- The first guide to Islamic finance focused solely on money and capital markets.
Contents
Chapter 1 An Introduction to Conventional and Islamic Financial Systems
- Learning Outcomes
- Introduction
- The Roles and Functions of Financial Markets
- Structures of Financial Markets
- Based on the Instrument
- Based on the Issuance of Securities
- Methods Used in Secondary Markets
- Based on the Maturity
- Classification of Financial Markets
- The Money Market
- The Capital Market
- Types of Financial Intermediaries
- Depository Institutions
- Contractual Institutions
- Investments and Finance Institutions
- A Brief Overview of the Islamic Financial System
- Evolution of Islamic Finance
- Chapter Summary
- Chapter Questions
- Notes
- References
Chapter 2 Development of Islamic Capital and Money Markets in Malaysia
- Learning Outcomes
- Introduction
- Development of Islamic Financial Institutions in Malaysia
- 1960 to 1990: Establishment of Islamic Financial Institutions
- 1990 to 2000: Conventional Banks Allowed to Offer Islamic
- Financial Products and Services
- 2000 to 2010: Islamic Subsidiaries and the International Integration of the Islamic Banking System
- Islamic Capital Markets in Malaysia
- Sukuk
- Islamic Collective Investments
- Islamic Stock Broking
- Malaysia International Islamic Financial Centre (MIFC)
Chapter 3 Regulators and Transactions Platform for Capital and Money Markets
- Learning Outcomes
- Introduction
- Bank Negara Malaysia (BNM)
- Role and Functions
- BNM Administered Legislation
- Role of BNM on ICM Development
- The Securities Commission (SC)
- Role of SC on ICM Development
- Bursa Malaysia (BM)
- Role of BM on ICM Development
- Shariah-Compliant Stocks and ETF
- Islamic Equity Indices
- Islamic REITs and Sukuk Market
- Websites
Chapter 4 Islamic Money Market
- Learning Outcomes
- Introduction
- Money Market Participants
- Functions of the Islamic Money Market
- Differences between Islamic and Conventional Money Markets
- Components of the Malaysian Islamic Money Market
- Islamic Interbank Market
- Mudarabah Interbank Investment
- Profit Calculation for Mudarabah Interbank Investment
- Example: Mudarabah Interbank Investment (MII)
- Commodity Murabahah
- Example: Commodity Murabahah Interbank Investment
- Wakalah Investment
- Trading of Islamic Money Market Instruments
- Government Investment Issue (GII)
- Example: Calculation of GII price
- Malaysian Islamic Treasury Bills (MITB)
- Example: Calculation of Proceeds on MITB
- Bank Negara Monetary Notes (BNMN)
- Sukuk Bank Negara Malaysia Ijarah (SBNMI)
- Islamic Negotiable Instruments (INI)
- Negotiable Islamic Debt Certificate (NIDC)
- Example: Calculation of Price of NIDC of Less Than One Year
- Example: Calculation of Price NIDC with Maturity of More Than One Year
- Islamic Negotiable Instruments of Deposit (INID)
- Example: Calculation of Proceeds for an INID
- Islamic Accepted Bill (IAB)
- Import and Local Purchases
- Export/ Local Trade
- Example: Price Calculation of IAB under Bai al-Dayn
- Sell and Buy Back Agreement (SBBA)
- Example: Sell and Buy Back Agreement
- Cagamas Sukuk
- Sanadat Mudarabah Cagamas (SMC)
- Example: Sanadat Mudarabah Cagamas (SMC) Calculation
- Sanadat Cagamas
- Islamic Corporate Sukuk
Chapter 5 An Overview of Sukuk
- Learning Outcomes
- Introduction
- Comparing Sukuk, Bonds, and Shares
- Sukuk Types
- Sukuk Structures
- Sukuk al-Ijarah
- Sukuk al-Musharakah
- Sukuk al-Mudarabah
- Sukuk al-Salam
- Sukuk al-Istisna
- Sukuk al-Murabahah
- Sukuk al-Istithmar
- Sukuk al-Wakala
Chapter 6 Shariah-Compliant Equity
- Learning Outcomes
- Introduction
- The Structure of Equity Markets
- Shariah-Compliant Equity Securities
- Differences between Shariah and Non–Shariah-Compliant Equity Markets
- Shariah-Compliant Stocks Screening
- Malaysia Securities Commission
- S&P Shariah Indices
- Pakistan Meezan Islamic Fund
- Global GCC Islamic Fund Screening
- Jakarta Islamic Index
Chapter 7 Islamic Mutual Funds
- Learning Outcomes
- Introduction
- Closed and Open-Ended Funds
- Conventional Mutual Funds
- Active and Passive Management
- Advantages of Mutual Funds
- Disadvantages of Mutual Funds
- Fees and Expenses
- Islamic Mutual Funds
- Basic Concept of Islamic Mutual Funds
- Shariah Stock Screening
- Purification of Income
- Types of Islamic Mutual Funds
- The Role of the Shariah Advisory Board in Islamic Mutual Funds
- Calculating NAV in the Islamic Mutual Funds
- Organisation of Islamic Mutual Funds
- The Process of Investing in Islamic Mutual Funds
- Islamic Ethical Investment and Ethical Investment
Chapter 8 Islamic Real Estate Investment Trusts (I-REITs)
- Learning Outcomes
- Introduction
- Islamic Real Estate Investment Trusts (I-REITs)
- Shariah-Permissible Investments for I-REITs
- I-REITs Structure
- Case Study: Al-’Aqar KPJ REIT
- Case Study: Al-Hadharah Bousted REIT
- Difference between Conventional and Islamic REITs
Chapter 9 Islamic Exchange-Traded Funds
- Learning Outcomes
- Introduction
- Open- and Closed-End Funds, and Unit Trust Funds
- Open-End Funds
- Closed-End Funds
- Unit Trust
- Exchange-Traded Funds (ETFs)
- Islamic Exchange Trade Funds (I-ETFs)
- Security Borrowing and Lending in Malaysia
- Islamic ETFs in Other Countries
- Challenges in Promoting I-ETFs
Chapter 10 Islamic Derivatives Market
- Learning Outcomes
- Introduction
- Derivative Securities in the Conventional Market
- Risk Profile
- Main Players in the Derivative Markets
- Hedging with a Forward Contract
- Hedging with Future Contracts
- Hedging with Swap Contracts
- Derivative Securities in the Islamic Perspective
- Islamic Forward and Future Contract
- Islamic Option Contract
- Islamic Cross-Currency Swap
- Islamic Profit Rate Swap
- Islamic Structured Product
- Bibliography
- Index
About the Authors
- Mohd Azmi Omar, PhD, is the Director General of the Islamic Research & Training Institute (IRTI), Islamic Development Bank. He was formerly the Deputy Rector (Deputy Vice-Chancellor) in charge of academics and research at the International Islamic University Malaysia (IIUM). He obtained his bachelor's and master's degrees in finance from Northern Illinois University, USA, and his PhD from Bangor University, United Kingdom.
- Muhamad Abduh is the Head of Research of IIUM's International Institute of Islamic Business and Finance (IIiBF) and the editor-in-chief of its official journal, the Journal of Islamic Finance.
- Dr. Raditya Sukmana is an Assistant Professor in the Department of Islamic Economics, Airlangga University, Indonesia.
Book Details
- Paperback: 256 pages
- Publisher: Wiley; 1 edition (c2013)
- Language: English
- ISBN-10: 1118503996
- ISBN-13: 978-1118503997
- Product Dimensions: 0.9 x 6.9 x 9.4 inches
- List Price: $70.00