Prof. Dr. Obiyathulla Ismath Bacha
Qualification:Doctor of Business Administration (specialization in Finance) Boston University, USA. (1993)
Fields/Area of Specialization:Finance and Accounting
Prof. Dr Obiyathulla Ismath Bacha achieved his Bachelor of Social Science from the University Science Malaysia, a Master of Business Administration, a Masters in Economics and his Doctor of Business Administration in Finance from Boston University. He is currently a professor of Finance at INCEIF. Previously he has held several key positions at the International Islamic University of Malaysia. He was also an assistant professor in finance at Boston University, he taught at both MBA and undergraduate levels. He is also an active Shariah advisor to institutions such as Five Pillars and Sabana REIT. Prof. Dr. Obiyathulla is also the Vice President of the Malaysian Economic Association and a member of the Malaysian Finance Association.

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Showing results 1 to 10 of 98
  • Is_there_diversification_cost_Shariah_compliance_Obiyathulla_et al.pdf.jpg
  • Journal Article


  • Authors: Mustaffa Kamil, Nazrol Kamil; Bacha, Obiyathulla Ismath; Mohammed Masih, Abul Mansur (2021)

  • Islamic equity portfolios work with a smaller investment universe given the filtering of non Shari'ah compliant stocks. It has been theoretically argued that this culminates in suboptimal portfolio diversification, which in turn adversely affects risk-adjusted returns. We offer empirical evidence that such a conceived portfolio diversification "penalty" is far from a foregone conclusion, at least empirically. Our results tend to indicate that Islamic portfolios are not invariably handicapped in terms of portfolio diversification. We also explored dimensions that may account for differences in the relative investment performance between Islamic and conventional portfolios, such as port...

  • item.jpg
  • Chapter in Book


  • Authors: Mokhtar, Maznita; Abdul Kareem, Mohamed Ariff; Bacha, Obiyathulla Ismath (2020)

  • There is wide consensus that the ultimate objective of government policies is to improve the quality of people's lives. The reality, however, is that the impact of government policies tends to be measured rather in terms of GDP growth as proxy for progress. The debate about growth vs. development is not new as the distinction between these concepts was recognized since the 1970s. GDP growth has often been understood in terms of improvement in the quality of life. However, further research is indicating that inequality affects sustainable growth (Berg and Ostry 2011), which in turn reduces the ability to improve the quality of life. This is the case of many OECD nations where household...

  • item.jpg
  • Chapter in Book


  • Authors: Akin, Tarik; Bacha, Obiyathulla Ismath; Mirakhor, Abbas; Iqbal, Zamir (2020)

  • Increasing inequalities is one of the defining social, economic, and political challenges of the post-Global Financial Crisis (GFC) era. Apart from the negative social, public finance, and short-run growth effects of high inequality, the compelling evidence indicates that inequality is an important cause for the financial crises (Kumhof, Ranciere, and Winant 2015; Rajan 2010; de Haan and Sturm 2016; Turner 2016) and low long-term economic growth (World Economic Forum 2017; OECD 2015; IMF 2017). The inequality problem and its visible repercussions on economic growth and financial crises have spurred interest in the economics of inequality.

  • too_small_succeed_versus_too_big_fail_marjan_obiya_mansur.pdf.jpg
  • Journal Article


  • Authors: Naseri, Marjan; Bacha, Obiyathulla Ismath; Mohammed Masih, Abul Mansur (2020)

  • Even though large banks could imply large risks and heightened vulnerability for a country's macroeconomy, the presence of many small banks with similar behavior such as Islamic banks could also cause systemic risks. This article makes an initial attempt to investigate the impact of bank size on banking performance. Our study spans 12 emerging countries with dual banking systems and applies two-step dynamic system GMM estimator. The results show that size really does matter in the banking industry, and its impact on performance tends to be non-linear with a trade-off between profitability and efficiency. Comparing conventional with Islamic banks, we find that bank size has almost the ...

  • The_effects_interest_rate_Islamic bank_financing_instruments_Obiyathulla et al.pdf.jpg
  • Journal Article


  • Authors: Seho, Mirzet; Bacha, Obiyathulla Ismath; Smolo, Edib (2020)

  • In theory, the cornerstones of Islamic finance are interest avoidance and risk-sharing. In practice, however, Islamic banks seem to be lacking both, particularly the latter. We investigate the interest rate impact on Islamic banks' three most-widely used types of financing instruments - i.e. sale-based, lease-based and risk-sharing-by employing the system GMM estimators on a unique panel data set of 77 Islamic banks from 13 countries over the period 2003-2017. We find that sale- and lease-based financing instruments are negatively correlated with the interest rate and that their exposure is amplified in more developed Islamic banking jurisdictions. Risk-sharing instruments, however, a...

  • debt_debt_even_Shariah-compliant_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2019)

  • In a book aptly titled 'This Time Is Different', Rogoff and Reinhart, two prominent economists, show that every single financial crisis over the last 800 years has had a single root cause - excessive debt. It appears that what begins as borrowing for the funding of development infrastructure can, as it builds, lead to a spiralling of debt and financial crisis. There is a circular and reciprocal relationship between debt, leverage, vulnerability and financial distress. This applies to all borrowers, governments, corporations or other entities.

  • capital_structure_Shariah_compliance_firms_Malaysian_evidence_obiyathulla et al.pdf.jpg
  • Chapter in Book


  • Authors: Abdul Halim, Asyraf; Abd Sukor, Mohd Edil; Bacha, Obiyathulla Ismath (2019)

  • In the literature of corporate finance, there exists alongside others, an age long inquiry into the behaviour and determinants of corporate capital structure. The study into capital structure behaviour was pioneered by Modigliani and Miller (1958, 1963) and which is still widely research today. Despite years of research, much are still unknown to us, which determinants are reliable explanator of capital structure variations across firms and time. In 1984, Stewart C. Myers officially introduced the "Capital Structure Puzzle" in his American Finance Association Presidential Speech. The capital structure puzzle at its heart asks the question of how do firms decide and manage their capita...

  • farewell_goldilocks_economy_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2019)

  • In 2018, the global economy began with much promise. The prior year had seen fairly strong and synchronised growth across the US, Western Europe and industrialised Asia. Stock markets rose to reect this steady stable growth. The S&P 500 had one of its most consistent and strongest runs in the 10-month period leading to October 2018. The broad-based index reached its historic peak in late September. Since then, from October, both the global economy and stock markets appeared to have gone through a series of jolts. Risk and volatility appear to have returned with a vengeance. The last quarter (4Q) of 2018 was tumultuous from an economic viewpoint. Why the sudden turn of fortune? For one...

  • strategy_rejuvenate_Islamic_finance_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2019)

  • The Islamic banking and finance (IBF) sector appears to be at a crossroads. Over the last three decades, growth has been impressive, with total assets estimated at about US$2 trillion (RM8.32 trillion). Looking back, this impressive early growth appears to have been the low hanging fruit. Rapid growth came from filling an existing latent demand. Geographically speaking, even this early growth has been uneven. Growth had been most impressive in countries such as Malaysia and Bahrain, but slower in larger nations such as Turkey, Indonesia and even Saudi Arabia, where it has only recently begun to make an impact. In much of the Arab world, countries like Egypt, Tunisia and the like, IBF ...

  • infantile_equity_markets_drag_development_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2019)

  • If well-developed equity markets can contribute hugely to national growth, underdeveloped ones impose a huge cost on national competitiveness through higher required risk premiums and higher equity costs to firms. The high cost of equity has the added disadvantage of incentivising firms to leverage their capital structure with debt. Thus, the common phenomenon of developing countries with infantile stock markets and highly leveraged economies. Retarded stock markets offer perverse incentives, both to managers of firms and shareholders. So, how do the equity markets of the Islamic world stack up? To address this, we examined the performance of the Muslim world's top eight stock markets...

Prof. Dr. Obiyathulla Ismath Bacha
author picture
Qualification: Doctor of Business Administration (specialization in Finance) Boston University, USA. (1993)
Fields/Area of Specialization: Finance and Accounting
Prof. Dr Obiyathulla Ismath Bacha achieved his Bachelor of Social Science from the University Science Malaysia, a Master of Business Administration, a Masters in Economics and his Doctor of Business Administration in Finance from Boston University. He is currently a professor of Finance at INCEIF. Previously he has held several key positions at the International Islamic University of Malaysia. He was also an assistant professor in finance at Boston University, he taught at both MBA and undergraduate levels. He is also an active Shariah advisor to institutions such as Five Pillars and Sabana REIT. Prof. Dr. Obiyathulla is also the Vice President of the Malaysian Economic Association and a member of the Malaysian Finance Association.
Showing results 1 to 10 of 98
  • Is_there_diversification_cost_Shariah_compliance_Obiyathulla_et al.pdf.jpg
  • Journal Article


  • Authors: Mustaffa Kamil, Nazrol Kamil; Bacha, Obiyathulla Ismath; Mohammed Masih, Abul Mansur (2021)

  • Islamic equity portfolios work with a smaller investment universe given the filtering of non Shari'ah compliant stocks. It has been theoretically argued that this culminates in suboptimal portfolio diversification, which in turn adversely affects risk-adjusted returns. We offer empirical evidence that such a conceived portfolio diversification "penalty" is far from a foregone conclusion, at least empirically. Our results tend to indicate that Islamic portfolios are not invariably handicapped in terms of portfolio diversification. We also explored dimensions that may account for differences in the relative investment performance between Islamic and conventional portfolios, such as port...

  • item.jpg
  • Chapter in Book


  • Authors: Mokhtar, Maznita; Abdul Kareem, Mohamed Ariff; Bacha, Obiyathulla Ismath (2020)

  • There is wide consensus that the ultimate objective of government policies is to improve the quality of people's lives. The reality, however, is that the impact of government policies tends to be measured rather in terms of GDP growth as proxy for progress. The debate about growth vs. development is not new as the distinction between these concepts was recognized since the 1970s. GDP growth has often been understood in terms of improvement in the quality of life. However, further research is indicating that inequality affects sustainable growth (Berg and Ostry 2011), which in turn reduces the ability to improve the quality of life. This is the case of many OECD nations where household...

  • item.jpg
  • Chapter in Book


  • Authors: Akin, Tarik; Bacha, Obiyathulla Ismath; Mirakhor, Abbas; Iqbal, Zamir (2020)

  • Increasing inequalities is one of the defining social, economic, and political challenges of the post-Global Financial Crisis (GFC) era. Apart from the negative social, public finance, and short-run growth effects of high inequality, the compelling evidence indicates that inequality is an important cause for the financial crises (Kumhof, Ranciere, and Winant 2015; Rajan 2010; de Haan and Sturm 2016; Turner 2016) and low long-term economic growth (World Economic Forum 2017; OECD 2015; IMF 2017). The inequality problem and its visible repercussions on economic growth and financial crises have spurred interest in the economics of inequality.

  • too_small_succeed_versus_too_big_fail_marjan_obiya_mansur.pdf.jpg
  • Journal Article


  • Authors: Naseri, Marjan; Bacha, Obiyathulla Ismath; Mohammed Masih, Abul Mansur (2020)

  • Even though large banks could imply large risks and heightened vulnerability for a country's macroeconomy, the presence of many small banks with similar behavior such as Islamic banks could also cause systemic risks. This article makes an initial attempt to investigate the impact of bank size on banking performance. Our study spans 12 emerging countries with dual banking systems and applies two-step dynamic system GMM estimator. The results show that size really does matter in the banking industry, and its impact on performance tends to be non-linear with a trade-off between profitability and efficiency. Comparing conventional with Islamic banks, we find that bank size has almost the ...

  • The_effects_interest_rate_Islamic bank_financing_instruments_Obiyathulla et al.pdf.jpg
  • Journal Article


  • Authors: Seho, Mirzet; Bacha, Obiyathulla Ismath; Smolo, Edib (2020)

  • In theory, the cornerstones of Islamic finance are interest avoidance and risk-sharing. In practice, however, Islamic banks seem to be lacking both, particularly the latter. We investigate the interest rate impact on Islamic banks' three most-widely used types of financing instruments - i.e. sale-based, lease-based and risk-sharing-by employing the system GMM estimators on a unique panel data set of 77 Islamic banks from 13 countries over the period 2003-2017. We find that sale- and lease-based financing instruments are negatively correlated with the interest rate and that their exposure is amplified in more developed Islamic banking jurisdictions. Risk-sharing instruments, however, a...

  • debt_debt_even_Shariah-compliant_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2019)

  • In a book aptly titled 'This Time Is Different', Rogoff and Reinhart, two prominent economists, show that every single financial crisis over the last 800 years has had a single root cause - excessive debt. It appears that what begins as borrowing for the funding of development infrastructure can, as it builds, lead to a spiralling of debt and financial crisis. There is a circular and reciprocal relationship between debt, leverage, vulnerability and financial distress. This applies to all borrowers, governments, corporations or other entities.

  • capital_structure_Shariah_compliance_firms_Malaysian_evidence_obiyathulla et al.pdf.jpg
  • Chapter in Book


  • Authors: Abdul Halim, Asyraf; Abd Sukor, Mohd Edil; Bacha, Obiyathulla Ismath (2019)

  • In the literature of corporate finance, there exists alongside others, an age long inquiry into the behaviour and determinants of corporate capital structure. The study into capital structure behaviour was pioneered by Modigliani and Miller (1958, 1963) and which is still widely research today. Despite years of research, much are still unknown to us, which determinants are reliable explanator of capital structure variations across firms and time. In 1984, Stewart C. Myers officially introduced the "Capital Structure Puzzle" in his American Finance Association Presidential Speech. The capital structure puzzle at its heart asks the question of how do firms decide and manage their capita...

  • farewell_goldilocks_economy_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2019)

  • In 2018, the global economy began with much promise. The prior year had seen fairly strong and synchronised growth across the US, Western Europe and industrialised Asia. Stock markets rose to reect this steady stable growth. The S&P 500 had one of its most consistent and strongest runs in the 10-month period leading to October 2018. The broad-based index reached its historic peak in late September. Since then, from October, both the global economy and stock markets appeared to have gone through a series of jolts. Risk and volatility appear to have returned with a vengeance. The last quarter (4Q) of 2018 was tumultuous from an economic viewpoint. Why the sudden turn of fortune? For one...

  • strategy_rejuvenate_Islamic_finance_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2019)

  • The Islamic banking and finance (IBF) sector appears to be at a crossroads. Over the last three decades, growth has been impressive, with total assets estimated at about US$2 trillion (RM8.32 trillion). Looking back, this impressive early growth appears to have been the low hanging fruit. Rapid growth came from filling an existing latent demand. Geographically speaking, even this early growth has been uneven. Growth had been most impressive in countries such as Malaysia and Bahrain, but slower in larger nations such as Turkey, Indonesia and even Saudi Arabia, where it has only recently begun to make an impact. In much of the Arab world, countries like Egypt, Tunisia and the like, IBF ...

  • infantile_equity_markets_drag_development_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2019)

  • If well-developed equity markets can contribute hugely to national growth, underdeveloped ones impose a huge cost on national competitiveness through higher required risk premiums and higher equity costs to firms. The high cost of equity has the added disadvantage of incentivising firms to leverage their capital structure with debt. Thus, the common phenomenon of developing countries with infantile stock markets and highly leveraged economies. Retarded stock markets offer perverse incentives, both to managers of firms and shareholders. So, how do the equity markets of the Islamic world stack up? To address this, we examined the performance of the Muslim world's top eight stock markets...