The impact of Sukuk on the insolvency risk of conventional and Islamic banks

Smaoui, Houcem; Mimouni, Karim; Temimi, Akram

doi:10.1080/00036846.2019.1646406

Cited by 24 publications

(15 citation statements)

References 71 publications

(88 reference statements)

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…If the internal funding were not available, the financial manager would try to seek other funding obtained from the external sources by issuing a debenture or stocks in a capital market (Raffestin, 2017;Najeeb et al, 2017). Meanwhile, deciding on using a specific funding source is one of the most important financial management (Honková, 2015;Reboredo & Naifar, 2017;Smaoui et al, 2020).…”

Section: Introductionmentioning

confidence: 99%

Effects of Leverage, Liquidity, and Profitability on The Rating of Sukuk

2020

View full text Add to dashboard Cite

The rating of sukuk becomes the reflection of the capital markets' activities. The better rating of sukuk, the more investor’s interested to purchase a sukuk. This study aimed at explaining the effects of leverage, liquidity, and profitability towards the rating of sukuk. The technique of data analysis employed was ordinal logistic regression. The research result revealed that the leverage and liquidity affected the sukuk. Meanwhile, the profitability did not affect the rating of sukuk. The test result simultaneously showed that the leverage variable and liquidity affected the sukuk rating. On the other hand, the result of a pseudo test of R-square showed the impact of leverage and liquidity towards sukuk rating was as big as 100%. Overall, the research result in this study supported the previous research which discovered the impacts of leverage and liquidity variables towards the rating of sukuk.

show abstract

Section: Introductionmentioning

confidence: 99%

Effects of Leverage, Liquidity, and Profitability on The Rating of Sukuk

2020

View full text Add to dashboard Cite

show abstract

“…Sukuk-related studies in this domain are not diverse: stock price reaction to credit/sukuk rating changes or information content of sukuk issuance on abnormal return either in the crisis period or non-crisis period and sukuk rating impact on firm performance (see e.g. Ng & Ariff, 2019;Alam et al, 2013;Abd Rahim & Ahmad, 2016;Hassan et al, 2018;Khartabiel et al, 2020;Mohamed et al, 2017;Smaoui, Mimouni, & Temimi, 2019;Ab Hamid et al, 2014;Godlewski et al, 2010). Hence, the first hypothesis is as follows: H1: Sukuk ratings positively impact stock returns.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

“…Furthermore, sukuk ratings are contingent on the specific characteristics of Islamic bonds (Azmat et al, 2014), along with macroeconomic and market conditions (Hassan et al, 2019). Besides, sukuk ratings are influenced by the different settings of crisis vs non-crisis period (Khartabiel et al, 2020), by the different absorption process levels of the received information from sukuk announcement (Mohamed et al, 2017), and by different insolvency risk levels and the size of issuing firms, including financial institutions (Islamic banks) (Smaoui et al, 2019).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Do sukuk ratings non-contingently affect stock returns? Evidence from Indonesia and Malaysia

Qizam

2021

EBER

View full text Add to dashboard Cite

The objective of the article is to investigate two issues. First, whether the Islamic bond (sukuk) ratings are the key determinant in affecting stock returns and, second, whether firm-characteristic variables moderate the sukuk ratings effect on stock returns. Research Design & Methods: This study applied the panel estimated generalized least squares (EGLS) regression for two samples (from Indonesia and Malaysia) spanning two years, 2015-2016, for all variables, except for the intrinsic-value variable which spanned eight years, 2009-2016. Findings: The results show that the direct and positive effect of sukuk ratings on stock returns are significantly present in Malaysia but not in Indonesia, while the positive and significant moderating effects of firm-characteristic variables -especially leverage and intrinsic value of the firm -are more pronounced in the positive sukuk rating-stock return relationship in Indonesia than in Malaysia. Implications & Recommendations:The types of firm-characteristic variables involved in determining the effect of sukuk ratings on stock returns depend on the country's characteristics. As a result, adopting sukuk ratings to determine stock returns is not constant but, instead, it is contingent -to an extent -on other variables: firm-characteristic variables. These results suggest that still many factors should be explored so as to reach a better judgment on the quality of credit, including sukuk. Contribution & Value Added: While most previous studies employed the event-study method and did not specifically consider firm-characteristic effects on analysing the relationship between sukuk ratings and stock returns, this study sought to reveal whether sukuk ratings are the key determinant in affecting prices (or stock returns), and the extent to which firm-characteristic variables moderate the relationship between sukuk ratings and stock returns. Article type:research article

show abstract

“…Some researchers find that Sukuk issuance increases those variables (Haroon et al, 2019;Klein et al, 2017), while other researchers argue that Sukuk announcement reduces those variables (Bhuiyan et al, 2018;Hanefah & Sains, 2013). On the other hand, there are some researchers who discovered that Sukuk has no impact on those (Godlewski et al, 2013;Smaoui et al, 2019). Those different findings indicate that there is a gap of research from debatable impacts of Sukuk announcement of those variables, hence it is necessary to conduct the research about this issue, in particular in emerging context, Indonesia that is different compared to other developed countries.…”

Section: Introductionmentioning

confidence: 97%

The Sukuk Effect on Stock Return Volatility in Indonesia

Legina¹,

Muharam²,

Naufa

2020

persi

View full text Add to dashboard Cite

The purpose of this research is to examine the effect of the announcement of Sukuk issuance to stock return volatility and to examine the phenomenon of time the varying volatility that occurs in the movement of stock returns and volatility. The data used in this research are daily closing price and trading volume incorporate Sukuk issued during the year 2009-2013 in the D-100 D+100 of Observation period. Samples utilized the purposive sampling technique to obtain the Samples of 13 companies. This study uses EGARCH (Exponential Generalized Autoregressive Conditional Heteroscedasticity) method of analysis. The results show that the best model for each sample in the EGARCH model is different. The results show that the phenomenon of time-varying volatility occurred in 13 samples. From 13 samples, event announcement of the Sukuk issuance does not affect the volatility of stocks returns except for Multi Adira Finance company. Furthermore, the trading volume affects the stock returns volatility on 9 companies, hence do not affect the other four companies.

show abstract

The impact of Sukuk on the insolvency risk of conventional and Islamic banks

Cited by 24 publications

References 71 publications

Effects of Leverage, Liquidity, and Profitability on The Rating of Sukuk

Effects of Leverage, Liquidity, and Profitability on The Rating of Sukuk

Do sukuk ratings non-contingently affect stock returns? Evidence from Indonesia and Malaysia

The Sukuk Effect on Stock Return Volatility in Indonesia

Contact Info

Product

Resources

About