Mohd Edil Abd Sukor and Asyraf Abdul Halim
This paper aims to investigate the dynamic portfolio optimisation performance of numerous samples of Shariah-compliant firms in the USA vis-à-vis the overall conventional sample.
Abstract
Purpose
This paper aims to investigate the dynamic portfolio optimisation performance of numerous samples of Shariah-compliant firms in the USA vis-à-vis the overall conventional sample.
Design/methodology/approach
This paper constructs efficient frontiers and subsequently the capital market line using the ovport set of commands in STATA. From the capital market line, the tangent portfolio is found, and the Sharpe ratio of the tangent portfolio is the primary measurement of the dynamic portfolio optimisation performance of the samples of Shariah-compliant samples in this study.
Findings
This paper finds that the overall conventional sample will outperform the Shariah-compliant samples in most cases. However, there exists a consistent trend whereby the performance of the overall conventional sample will converge towards the performance of the Shariah-compliant samples (and even be lower at times), as the market approaches a looming crisis suggesting that the Shariah-compliant samples do not experience significant deteriorations in their performance as compared to the conventional sample and that they provide stability during such times.
Research limitations/implications
This paper assumes no transaction costs, illiquidity, bid-ask spread and non-compliant revenue purification all of which may negatively affect portfolio performance.
Practical implications
The findings of this paper suggest that Shariah-compliant samples should be included in portfolios during times of crisis because they are less affected by market-wide volatility.
Social implications
The stability of Shariah-compliant samples reflects the conservativity of the contemporary Shariah stock screening methodologies and the Shariah itself.
Originality/value
Portfolio optimisation studies on Shariah-compliant samples are usually static in nature and are conducted in selected Muslim countries. This paper studies the dynamic portfolio optimisation in the USA where a liquid Islamic capital market is non-existent.
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Mohd Edil Abd Sukor and Asyraf Abdul Halim
The paper aims to construct a theoretical framework to investigate whether the Shariah debt ratio screening in contemporary Shariah stock screening methodologies results in a bias…
Abstract
Purpose
The paper aims to construct a theoretical framework to investigate whether the Shariah debt ratio screening in contemporary Shariah stock screening methodologies results in a bias towards a certain set of corporate financial behaviour for Shariah-compliant firms in the USA where access to a liquid Islamic debt market is non-existent.
Design/methodology/approach
The paper extends the earnings valuation approach of Modigliani and Miller (1963) to theoretically asses the impacts of the 33% conventional debt limit on Shariah-compliant firms’ corporate financial behaviour. Then, supporting evidence is shown via empirical stylised facts of samples of Shariah-compliant firms in the USA.
Findings
A theoretical floor limit to investment cut-off rates is found for US Shariah-compliant firms so that lesser projects pass their internal rate of return versus conventional firms. Subsequently, such firms consistently show the following corporate financial characteristics: above-average size, larger marginal change in size and profitability in response to a given marginal change in investments, low book-to-market ratio and lower investment rates.
Research limitations/implications
The findings of this paper may not hold where access to a liquid Islamic capital market is present.
Practical implications
Caveat emptor. These findings may be inconsistent to the investor’s risk preferences.
Social implications
The findings suggests that Shariah-compliant firms are more conservative compared to their conventional counterparts.
Originality/value
The paper is the first to introduce a theoretical framework to address consistent biasness in corporate financial behaviour due to the Shariah debt screening. It may prove useful for future academic studies as well as investment managers.
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Bity Salwana Alias, Mohd Radzi Ishak and Muhammad Nur Asyraf Nordin
The main purpose of this study was to determine school leaders' ability to manage underprivileged students' needs, the level of achievement of these students and the relationship…
Abstract
Purpose
The main purpose of this study was to determine school leaders' ability to manage underprivileged students' needs, the level of achievement of these students and the relationship between the two variables.
Design/methodology/approach
A quantitative methodology comprising a questionnaire instrument was utilized to collect data from 239 underprivileged students attending schools in Kelantan, Malaysia. Descriptive statistics comprising mean values and standard deviations were calculated to determine school leaders' ability to manage underprivileged students' needs and the level of achievement of these students. Inferential statistics comprising a Pearson correlation was calculated to determine the relationship between the two variables.
Findings
School leaders' ability to manage underprivileged students' needs was high, whereas the achievement of underprivileged students was moderate. A weak positive relationship was observed between the two variables.
Research limitations/implications
The sample was limited to 15–16-year-old students in one state in Malaysia. Further research is therefore needed on samples from across Malaysia. This paper enhances knowledge of the relationship between school leaders' ability to manage underprivileged students' needs and the level of achievement of these students. This study also has implications for Maslow's human needs theory.
Practical implications
The implications of the findings for school management practices are that an ability to manage underprivileged students' needs can increase the level of achievement of these students. The findings also indicate that adhering to Sustainable Development Goals, the Malaysian Education Blueprint and the Eleventh Malaysian Plan to ensure quality education for underprivileged students is relevant and should be continued. The findings can also be used as input in training school leaders.
Social implications
The findings suggest that the community needs to take more responsibility for underprivileged students, especially in managing their needs, in order to increase the achievement. The findings can usefully be employed to reduce the social gap between underprivileged and privileged groups.
Originality/value
This is the first study to examine the relationship between school leaders' ability to manage underprivileged students' needs and the students' achievement.
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The purpose of this paper is to survey the viewpoints of various stakeholder groups on the philosophy and objectives of Islamic banking, particularly in a dual banking…
Abstract
Purpose
The purpose of this paper is to survey the viewpoints of various stakeholder groups on the philosophy and objectives of Islamic banking, particularly in a dual banking environment, as in the case of Malaysia.
Design/methodology/approach
The paper presents primary data collected by self‐administered and postal questionnaires involving a sample of 1,500 respondents representing seven stakeholder groups, namely customers, depositors, local communities, Islamic banking managers, employees, banking regulatory officers and Shariah advisers. An exploratory factor analysis is employed to examine the respondents' perceptions towards various objectives of Islamic banking.
Findings
This paper reveals that respondents regard Islamic banking as an institution that should uphold social objectives and promote Islamic values towards their staffs, clients and the general public. Other factors perceived to be important include contributing to the social welfare of the community, promoting sustainable development projects and alleviating poverty.
Practical implications
The empirical evidence of this paper affects two aspects; first Islamic banks must not be solely profit‐driven entities; rather they must aim at promoting Islamic norms and values to achieve the economic objectives as prescribed by Shariah (Islamic Law). Second, true success for Islamic banking participants depends on the extent to which they can integrate social goals with the mechanics of financial innovation. This research will be of interest to both incumbent and potential entrants into this niche market.
Originality/value
The paper reports findings from the first nation‐wide survey of diverse stakeholder groups in the area of Islamic banking and finance.
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Jarita Duasa, Nurul Jannah Zainan Nazri and Raudlotul Firdaus Fatah Yasin
This study aims to investigate the tendency that Malaysian consumers will choose the recombinant collagen-like protein (RCLP) from bacteria as an alternative source of collagen in…
Abstract
Purpose
This study aims to investigate the tendency that Malaysian consumers will choose the recombinant collagen-like protein (RCLP) from bacteria as an alternative source of collagen in their consumption and the determinants of the consumer acceptance.
Design/methodology/approach
Quantitative approach is adopted in the study. Descriptive analysis and logistic regression are used to analyze primary data collected from a survey.
Findings
The likelihood of consumers choosing RCLP as an alternative source of collagen is higher among elderly and females. The choice is significantly influenced by the idea that the collagen should support maqasid al-syariah, approved by national Islamic body, should clear on the ingredients used and could boost local economic activities in the future.
Research limitations/implications
An ethical halal policy should be outlined as the guiding principles to the potential producers of RCLP.
Originality/value
An alternative source of collagen using bacteria as proposed is not yet being introduced in Malaysian industry, and the analysis on probability that consumers will accept this new sourced collagen product is using primary data from survey.
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Nasrun Mohamad and Asmak Ab Rahman
This paper aims to present the results of a comprehensive literature review with regard to the application of Tawarruq in the Islamic banking system covering the period between…
Abstract
Purpose
This paper aims to present the results of a comprehensive literature review with regard to the application of Tawarruq in the Islamic banking system covering the period between 2011 and before. The review aims to synthesize the previous research, capsulize the structural overview inasmuch as future research might be oriented and identify the gaps and direction for future research.
Design/methodology/approach
A range of published and unpublished documents was collated and filtered based on the defined rules to identify the determinants of the writing. The documents were then be classified into few segments in which content analysis was conducted to capsulize the essence of the subject matter described in the literature.
Findings
The analysis demonstrates that most of the studies discussed the fundamental theories which concerning the area of jurisprudence, while a few of them did discuss the application aspect in the banking environment. However, none of the operational process is discussed in-depth, whereas the risk of Shari’ah non-compliance might arise in the detail transaction.
Research limitations/implications
The databases used in the search might not contain all the documents that could be relevant for the review. Furthermore, the defined-rule for document searching and selection excluded the out-of-scope documents that might be relevant.
Originality/value
This paper identifies the gaps that become apparent in the literature in assisting researchers to ascertain the interesting areas as well as the direction for future research.
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Hamdy Abdullah, Fahru Azwa Mohd Zain, Hafizan Juahir, Hazrin Izwan Che Haron, Azimah Ismail, Talat Islam and Sheikh Ahmad Faiz Sheikh Ahmad Tajuddin
This study aims to construct comprehensive index of Tahfiz empowerment taking into account various factors such as social, intellectual, physical and religious, as well as…
Abstract
Purpose
This study aims to construct comprehensive index of Tahfiz empowerment taking into account various factors such as social, intellectual, physical and religious, as well as economical. According to Maqasid Shariah, Malaysia has to establish a Tahfiz Empowerment Index (TEI) for the implementation of National Tahfiz Education Policy (NTEP) to ensure that Tahfiz institutions assist students’ development in a productive and meaningful way consistent with Islamic values and national educational objectives.
Design/methodology/approach
This study proposes the TEI using Maqasid Shariah to offer an organized framework for evaluating and improving the quality and social relevance of Tahfiz institutions. The TEI weaves the five fundamental aims of Maqasid Shariah – preserving religion, protecting life, fostering intellect, preserving lineage and ensuring economic sustainability – into measurable indicators. Comprehensive review of the literature supports the TEI and its using experts, and the TEI assigns equal weightage to each dimension and has provisions to address biases.
Findings
The TEI consists of five fundamental aspects: preservation of religion, life, intellect, lineage and economic sustainability. The results imply that systematic way of evaluating and enhancing performance of Tahfiz institution is crucial as the study proves the institution’s importance in the development of its students.
Research limitations/implications
The TEI provides a systematic framework to be used in future empirical research that searches for the operation of Tahfiz institutions and their outcome. Moreover, it serves as a theoretical basis for further research on Islamic education and its alignment with Maqasid Shariah. It also propounds a holistic and inclusive approach encompassing improvement in educational possibilities.
Practical implications
The TEI has useful managerial and policy implications for the improvement of Tahfiz institutions. It can be used as a benchmark whenever the policymaker is in doubt about the quality, safety and equitable distribution of resources in education to achieve Malaysia’s NTEP objectives. The TEI also provides practical, tangible performance indicators for evaluation and benchmarking, resource allocation and strategy planning. It integrates Maqasid Shariah principles, focusing on areas like spiritual and intellectual development, economic sustainability and community engagement.
Social implications
The TEI as part of Sustainable Development Goals 2030 contributes to social benefits: integrating the principles of Islamic education and human dignity and social welfare. It erases the existing gaps by providing the necessary means through such practices as offering vocational training to underprivileged students, contributes to social responsibility by enhancing mental health and encouraging services to the community, and ultimately improves community involvement through volunteerism and collaborations. Also, TEI directs the distribution of funds toward programs that should benefit underprivileged learners, thus maintain sustainable fund allocation as well as promoting social responsibility as per NTEP objectives.
Originality/value
This study presents a novel index grounded on Maqasid Shariah which is useful for assessing and improving the Tahfiz institutions. It gives a definite and systematic method of evaluating these institutions’ degrees of empowerments to meet all the diverse roles they play in the society.