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on Islamic Finance |
| By: | Hanif, Muhammad |
| Abstract: | This study documents the comparative financial performance of the Islamic Banking Services Industry (IBSI) in the Gulf Cooperation Council (GCC) region. After drawing the performance evaluation framework (based on the CAMEL framework), the research conducted data analysis of the Islamic Banking Services Industry (IBSI) in the GCC region for 31 quarters (2013Q4–2021Q4). The analysis examines capital adequacy, asset quality, management performance, earnings, and liquidity management. Objectively classified data trends are reported through graphs. Additionally, the research documents internal determinants of financial performance. Findings suggest that the GCC-IBSI has shown overall progress in achieving primary objectives (commercial performance), including healthy capital adequacy, cost control, equity returns, and liquidity management. Capital adequacy, cost control, and liquidity management significantly contribute to financial performance. Managerial implications include cost control, reduction in non-performing loans, and prudent liquidity management. There exist opportunities in the GCC-IBSI for investors, given the mismatch in demand and supply of Islamic financial services. This study contributes to the literature by documenting findings on the achievements of the primary objective of IBSI in multiple GCC-IBSI markets comparatively. |
| Date: | 2024–11–18 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:379un_v1 |
| By: | Hanif, Muhammad |
| Abstract: | Abstract. The study identifies the difference in the long-run risk factors for Conventional Capital Market (CCM) and Islamic Capital Market (ICM) in the post-Shari’ah-screening era in an emerging market. The sample includes macroeconomic variables representing the real sector (industrial production), money market (interest rate), international market (exchange rate) and external sector (exports and workers’ remittances) and two market indexes for 164 Months (01/10–08/23). Johansen cointegration and Granger causality tests are applied to document the evidence. Results support the integration of market indexes with macroeconomic indicators; however, market indexes lack mutual integration in the long run. The integrated group of variables differs slightly for ICM (exchange rate and industrial production) and CCM (industrial production). The real sector activity is reflected in the market, while the monetary sector is missing. The behaviour of the Islamic market is in line with the theory – a reflection of the real sector and lack of integration with interest rates. We recommend three policy actions, including improved facilitation of industrial production, prudent management of exchange rate, and a balanced monetary policy, as theory suggests the usefulness of stock indicators for monetary policymaking. The comparative study on macroeconomic risk factors in an emerging market enhances the understanding of a market with dual indexes, including CCM and ICM. |
| Date: | 2025–03–30 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:24kpt_v1 |