Equity Pricing in Islamic Banks: International Evidence

Grira, Jocelyn; Hassan, M. Kabir; Labidi, Chiraz; Soumaré, Issouf

doi:10.1080/1540496x.2018.1451323

Cited by 21 publications

(17 citation statements)

References 67 publications

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“…Failure in carrying out the main role of banks in detecting profitable or riskier investment may results in financial catastrophe and trigger economic crises in the long run. According to Grira et al (2018), they stress that Islamic banks tend to demonstrates higher equity financing costs compared to the conventional banks on average. This further strengthens the finding where Islamic banks tend to have weak bank governance in term of income allocation on assets.…”

Section: Resultsmentioning

confidence: 99%

Financial Performance Evaluation of Islamic Banking System: A Comparative Study among Malaysia’s Banks

2018

JEM

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The promotion of Islamic banking is parallel with the aim of Malaysia to be the pioneer of Islamic financial hub in the region. With the recent commitment, it is timely to further examine the performance of the industry constituents. Therefore, this study aims to investigate the performance of Islamic banking system in comparison to its conventional counterpart in Malaysia using CAMEL model. For that purpose, annual financial data collected from ten conventional and Islamic banks in Malaysia since 2004 until 2016 is used in the analysis. Both Dynamic Ordinary Least Square (DOLS) and Fully Modified Ordinary Least Square (FMOLS) estimations technique as suggested by Pedroni (2001) are employed. We find that conventional banking system performed better than its counterpart. The maturity of conventional banks which has treads Malaysia's financial market earlier could plausibly dominate the results. Our evidence suggests that the regulators should strengthen Islamic banking system through more reforms and mergers to improve its capital, assets, management, earnings and liquidity.

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Section: Resultsmentioning

confidence: 99%

Financial Performance Evaluation of Islamic Banking System: A Comparative Study among Malaysia’s Banks

2018

JEM

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“…The opinion of Pawpaw is supported by the results of the study, which concluded that the reference that is acquired from a real sector of the economy prevents debate and disagreement among the stakeholder in the pricing formula. It also brings accountability in the banking industry with the fairness reference used in the pricing rule (Daly & Frikha, 2016;Grira et al, 2019).…”

Section: Resultsmentioning

confidence: 99%

How Is the Real Sector Index Used for Pricing?

Setianingrum

Madjid

Santosa

2020

jamal

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How is the Real Sector Index Used for Pricing? This research tries to identify the key elements in the implementation of the real sector index for Islamic banking. Analytic network process was employed as method. This research finds that price is a micro issue, therefore banks should not only use macro approach. Banks need to build micro metadata on each of their customers' business sectors. The priority data that must be made available is the financial statements of companies listed on the stock exchange. The level of cash generated method becomes the priority formula to guide the price of each business financing. PHASE 1 M odel Construction PHASE 3 Result Analysis PHASE 2 M odel Quantification Re se archer Li te rature Re vie w Que stionnaire

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“…These higher levels of risks when integrate with the unique risks of Islamic banks create unexplained effects on the risk-return relationship. These unexplained effects have been identified by various contemporary researchers, for example, Abedifar et al (2013), Chattha and Alhabshi (2018); Grira et al (2018), Noor et al (2018); Anwer et al (2019), Archer and Karim (2019); Noor et al (2019b); Chattha et al (2020), Grassa et al (2020); and Ibrahim (2020).…”

Section: Introductionmentioning

confidence: 92%

Integration of Islamic bank specific risks and their impact on the portfolios of Islamic Banks

Shah

Sukmana

Fianto

2021

IMEFM

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Purpose This study aims to propose a risk management framework for Islamic banks to address specific risks that are unique to Islamic bank settings. Design/methodology/approach A unique methodology has been developed first by exploring the dynamics and behaviors of various risks unique to Islamic banks. Second, it integrates them through a series of diagrams that show how they behave, integrate and impact risk, returns and portfolios. Findings This study proposes a unique risk-return relationship framework encompassing specific risks faced by Islamic banks under the ambit of portfolio theory showing how Islamic banks establish a steeper risk-return path under Shariah compliance. By doing so, this study identifies a unique “Islamic risk-return” nexus in Islamic settings as an explanation for the concern of contemporary researchers that Islamic banks are more risky than conventional banks. Originality/value The originality of this study is that it extends the scope of risk management in Islamic banks from individual contract-based to an integrated whole, identifying a unique transmission path of how risks affect portfolio diversification in Islamic banks.

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Equity Pricing in Islamic Banks: International Evidence

Cited by 21 publications

References 67 publications

Financial Performance Evaluation of Islamic Banking System: A Comparative Study among Malaysia’s Banks

Financial Performance Evaluation of Islamic Banking System: A Comparative Study among Malaysia’s Banks

How Is the Real Sector Index Used for Pricing?

Integration of Islamic bank specific risks and their impact on the portfolios of Islamic Banks

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