Critical assessment of Islamic financial assets pricing in South-East Asia: evidence from NARDL modelling

Salami, Monsurat Ayojimi

doi:10.1108/jfra-12-2019-0175

Cited by 2 publications

(2 citation statements)

References 47 publications

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“…The seventh article (Salami, 2021) discussed, the pricing behaviour of Islamic financing assets and the implementation of AAOIFI and the IFSB, as suggested by Greuning and Iqbal (2008) This study urges AAOIFI and IFSB to be more efficient in providing more enriching information rather than relying heavily on financial report of Islamic financial sectors. However, the study critically examined the pricing of Islamic financial assets (Sharīʿah-compliant assets, Sharīʿah-compliant securities, Sharīʿah-compliant financing and Sukuk) in the three Southeast Asian countries such as Malaysia, Indonesia and Brunei and provided necessary information to the policymakers and Islamic finance investors for making a sound decision.…”

Section: Literature Reviewmentioning

confidence: 99%

“…However, the study critically examined the pricing of Islamic financial assets (Sharīʿah-compliant assets, Sharīʿah-compliant securities, Sharīʿah-compliant financing and Sukuk) in the three Southeast Asian countries such as Malaysia, Indonesia and Brunei and provided necessary information to the policymakers and Islamic finance investors for making a sound decision. Salami (2021), concluded that despite the finding that price adjustment for the pair of Islamic financial assets is faster especially when the relationship is significant, unfair price adjustment exists. Pricing of Sukuk was found to be asymmetrical for Malaysia and Indonesia studies while symmetrical pricing in the case of Brunei study.…”

Section: Literature Reviewmentioning

confidence: 99%

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Guest editorial

Sarea

2021

JFRA

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Guest editorial Editorial noteThe prospects and challenges of accounting for Islamic Financial Institutions in the Organisation of Islamic Cooperation Background issue Getting a systematic compilation of current trends in accounting for Islamic financial institutions (IFIs) detailing all aspects of accounting theories and practices in all Organisation of Islamic Cooperation (OIC) countries is sorely needed by a broad range of readership spanning over a large interest group such as the Sharīʿah scholars, academicians and researchers as well as Islamic financial practitioners. To this end, this special issue highlights the challenges, and prospects, of accounting for IFIs in OIC countries. In particular, cross-jurisdictional differences, in terms of the Islamic legal and regulatory environment, across OIC countries continue to pose substantial challenges in ensuring that accounting practices are based on a uniform application of Sharīʿah principles. Particular emphasis in this special issue is placed on financial statement preparation based on accounting standards for IFIs across OIC countries with a view towards uniformity designed to render financial statements more comparable, transparent and reliable for all users.The rationale for publication of this type of special issue is to serve the community of academicians, researchers, PhD students, Sharīʿah scholars, IFI practitioners as well as regulators and policymakers of IFIs. However, it is designed to appeal to a wider audience as detailed above; this special issue is to be structured as a single-volume comprehensive reference covering theoretical and practical aspects across multiple jurisdictions with respect to accounting standards for IFIs throughout all OIC countries. Issues related to interjurisdictional differences in accounting standards are limiting the ability of IFIs to promote their products and services in different countries worldwide.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

Guest editorial

Sarea

2021

JFRA

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Long-run asymmetric effects of financial risks on Sukuk market development: empirical evidence from Malaysia

Mohd Roslen,

Chua,

Hj Mohd Ruslan

2024

JIABR

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Purpose The purpose of this study is to empirically investigate the asymmetric effects of financial risk on Sukuk market development for a sample of Malaysian countries over the period of 2010–2021. Design/methodology/approach This study refers to the International Country Risk Guide (ICRG) in determining the financial risk factors to be studied in addition to the Malaysia financial stress index (FSI) to capture changes in financial risk level. The authors use the nonlinear autoregressive distributed lag (NARDL) model to tackle the nonlinear relationships between identified financial risk variables and Sukuk market development. Findings The results suggest the existence of a long-run relationship between foreign debt service stability, international liquidity stability (ILS), exchange rate stability (ERS) and financial stress level with the Sukuk market development in Malaysia. Indeed, higher ILS and ERS will boost Sukuk market size, whereas higher foreign debt services and financial stress are negatively related to Sukuk market development. Findings also indicate that the long-run positive and negative impacts of identified financial risk components on Sukuk market development are statistically different. Taking into account the role of the Sukuk market in facilitating Malaysia’s economic growth, the country should aim to keep the foreign debt-to-GDP ratio at a sustainable level. Research limitations/implications This study points to three possible directions for future research. The first is the differential impact of financial risk components on Sukuk issuance for different Sukuk structures. As more data becomes available in the future, this area could be further explored by conducting the above analysis for different combinations of Sukuk structures and currency denominations. In addition, future researchers could also consider exploring the variability of financial risk impacts through comparative studies of the leading Sukuk-issuing countries to account for differences in regulatory frameworks and supporting infrastructure. Practical implications This study provides valuable practical and policy implications for strengthening the growth of the Sukuk market. While benefiting from the diversification benefits of funding sources to finance private or government projects and developments, Malaysia should remain vigilant to global economic conditions, foreign exchange markets and financial stress levels, as all of these factors may significantly influence investor sentiment and the rate of return offered by Sukuk issuance. Originality/value The use of the NARDL approach, which investigates the long-run effects of financial risk factors on Sukuk market development in Malaysia, makes this study a valuable addition to the literature, as there has been little research into the asymmetric effects of those variables on Sukuk market development using samples from emerging Asian markets.

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Critical assessment of Islamic financial assets pricing in South-East Asia: evidence from NARDL modelling

Cited by 2 publications

References 47 publications

Guest editorial

Guest editorial

Long-run asymmetric effects of financial risks on Sukuk market development: empirical evidence from Malaysia

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