Prof. Dr. Obiyathulla Ismath Bacha
Qualification:Doctor of Business Administration (specialization in Finance) Boston University, USA. (1993)
Fields/Area of Specialization:Finance; 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 104
  • Capital_structure_theory_revisited_Fareiny Morni.pdf.jpg
  • PhD


  • Authors: Fareiny Morni (2022)

  • In the Islamic finance capital market spectrum, the potential of mudharabah and musyarakah sukuk is hampered with criticism by Shariah scholars. Among the criticisms include the presence of uncertainties surrounding sukuk returns, the risk of losses that the rabbul-mal (investors) have to bear, and the need to mitigate agency costs (for mudharabah contracts). This have made it a deterrent for both issuers and investors in seeing the instrument as a viable alternative to debt-based sukuk structures. This study proposes an improvement to musyarakah sukuk. It begins with a qualitative examination of the structure of corporate mudharabah and musyarakah sukuk issued in Malaysia. The examin...

  • Is_there_diversification_cost_Shariah_compliance_Obiyathulla_et al.pdf.jpg
  • Journal Article


  • Authors: Nazrol Kamil Mustaffa Kamil; Obiyathulla Ismath Bacha; Abul Mansur Mohammed Masih (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...

  • Lessons_from_Covid-19_what_the_virus_has_taught_us_Obiyathulla.pdf.jpg
  • Journal Article


  • Authors: Obiyathulla Ismath Bacha (2021)

  • The traditional view, of a linear relationship between the development levels of countries and their ability to deal with problems has been completely changed with the coronavirus disease 2019 (COVID-19) pandemic. The countries hit hardest by the pandemic have been the so called developed ones of Western Europe and the USA. Equating development to mega cities has been shown to be misplaced. The pandemic has spread fastest in crowded cities such as New York and Los Angeles. Aside from overpopulated cities, ignoring the environment and the need for healthy living conditions are other important reasons for their failure to control the epidemic. Yet, countries such as Taiwan, South Korea ...

  • item.jpg
  • PhD


  • Authors: Prachaya Suwanhirunkul (2021)

  • This thesis investigates the determinants and impact of short-term capital flow in the 33 OIC countries from 2000 to 2018 and bridges the understanding between both literature strands. The short-term capital flows are divided into gross inflows, outflows, and extreme episodes, analyzed under the push-pull framework. The empirical approaches for exploring the determinants of short-term capital flows consist of panel static and dynamic LSDV and probit models. Additional analysis controlling for Lucas's paradox conditions provides more insights and robustness. The study then analyzes their impact on economic growth (GDP), conventional, and Islamic stock markets. The study employs time-se...

  • The_pandemic_and_the_economic_conundrum_how_Islamic_finance_can_help_Obiyathulla.pdf.jpg
  • Journal Article


  • Authors: Obiyathulla Ismath Bacha (2021)

  • This paper examines the economic and financial impact of the Covid-19 pandemic and the responses that governments undertook. Though large and unprecedented in size, policy response has mostly been the same. Huge monetary stimulus, rate cuts, direct market intervention like bond purchases and debt moratoriums. Many of these were techniques used in the previous global financial of 2007-2009. Economies were already fragile and in a vulnerable state when the pandemic struck in late 2019. Continued use of the same policies did prevent a potential meltdown but has increased system vulnerability. The global debt burden is now much larger but governments may have fully expended all their mone...

  • too_small_succeed_versus_too_big_fail_marjan_obiya_mansur.pdf.jpg
  • Journal Article


  • Authors: Marjan Naseri; Obiyathulla Ismath Bacha; Abul Mansur Mohammed Masih (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 ...

  • item.jpg
  • Chapter in Book


  • Authors: Maznita Mokhtar; Mohamed Ariff Abdul Kareem; Obiyathulla Ismath Bacha (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: Tarik Akin; Obiyathulla Ismath Bacha; Abbas Mirakhor; Zamir Iqbal (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.

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


  • Authors: Mirzet Seho; Obiyathulla Ismath Bacha; Edib Smolo (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...

  • International_financial_integration_through_depositary_receipts_Obiyathullah et al.pdf.jpg
  • Journal Article


  • Authors: Obiyathulla Ismath Bacha; Norhazlina Ibrahim; Mansor H. Ibrahim (2020)

  • The issue of liquidity and underdevelopment of the Organisation of Islamic Cooperation (OIC) stock markets has caused problems to companies in those countries that seek higher equity capital. One way out of this problem is to employ international markets more intensively by seeking cheaper cost of capital through Depositary Receipts (DRs). Many studies on DRs focused on emerging and developed countries, leaving many OIC countries behind. Thus, this study investigates the financial implication by examining the integration of returns of local and foreign stock markets via American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) of OIC countries. Techniques employed in t...

Prof. Dr. Obiyathulla Ismath Bacha
author picture
Qualification: Doctor of Business Administration (specialization in Finance) Boston University, USA. (1993)
Fields/Area of Specialization: Finance; 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 104
  • Capital_structure_theory_revisited_Fareiny Morni.pdf.jpg
  • PhD


  • Authors: Fareiny Morni (2022)

  • In the Islamic finance capital market spectrum, the potential of mudharabah and musyarakah sukuk is hampered with criticism by Shariah scholars. Among the criticisms include the presence of uncertainties surrounding sukuk returns, the risk of losses that the rabbul-mal (investors) have to bear, and the need to mitigate agency costs (for mudharabah contracts). This have made it a deterrent for both issuers and investors in seeing the instrument as a viable alternative to debt-based sukuk structures. This study proposes an improvement to musyarakah sukuk. It begins with a qualitative examination of the structure of corporate mudharabah and musyarakah sukuk issued in Malaysia. The examin...

  • Is_there_diversification_cost_Shariah_compliance_Obiyathulla_et al.pdf.jpg
  • Journal Article


  • Authors: Nazrol Kamil Mustaffa Kamil; Obiyathulla Ismath Bacha; Abul Mansur Mohammed Masih (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...

  • Lessons_from_Covid-19_what_the_virus_has_taught_us_Obiyathulla.pdf.jpg
  • Journal Article


  • Authors: Obiyathulla Ismath Bacha (2021)

  • The traditional view, of a linear relationship between the development levels of countries and their ability to deal with problems has been completely changed with the coronavirus disease 2019 (COVID-19) pandemic. The countries hit hardest by the pandemic have been the so called developed ones of Western Europe and the USA. Equating development to mega cities has been shown to be misplaced. The pandemic has spread fastest in crowded cities such as New York and Los Angeles. Aside from overpopulated cities, ignoring the environment and the need for healthy living conditions are other important reasons for their failure to control the epidemic. Yet, countries such as Taiwan, South Korea ...

  • item.jpg
  • PhD


  • Authors: Prachaya Suwanhirunkul (2021)

  • This thesis investigates the determinants and impact of short-term capital flow in the 33 OIC countries from 2000 to 2018 and bridges the understanding between both literature strands. The short-term capital flows are divided into gross inflows, outflows, and extreme episodes, analyzed under the push-pull framework. The empirical approaches for exploring the determinants of short-term capital flows consist of panel static and dynamic LSDV and probit models. Additional analysis controlling for Lucas's paradox conditions provides more insights and robustness. The study then analyzes their impact on economic growth (GDP), conventional, and Islamic stock markets. The study employs time-se...

  • The_pandemic_and_the_economic_conundrum_how_Islamic_finance_can_help_Obiyathulla.pdf.jpg
  • Journal Article


  • Authors: Obiyathulla Ismath Bacha (2021)

  • This paper examines the economic and financial impact of the Covid-19 pandemic and the responses that governments undertook. Though large and unprecedented in size, policy response has mostly been the same. Huge monetary stimulus, rate cuts, direct market intervention like bond purchases and debt moratoriums. Many of these were techniques used in the previous global financial of 2007-2009. Economies were already fragile and in a vulnerable state when the pandemic struck in late 2019. Continued use of the same policies did prevent a potential meltdown but has increased system vulnerability. The global debt burden is now much larger but governments may have fully expended all their mone...

  • too_small_succeed_versus_too_big_fail_marjan_obiya_mansur.pdf.jpg
  • Journal Article


  • Authors: Marjan Naseri; Obiyathulla Ismath Bacha; Abul Mansur Mohammed Masih (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 ...

  • item.jpg
  • Chapter in Book


  • Authors: Maznita Mokhtar; Mohamed Ariff Abdul Kareem; Obiyathulla Ismath Bacha (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: Tarik Akin; Obiyathulla Ismath Bacha; Abbas Mirakhor; Zamir Iqbal (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.

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


  • Authors: Mirzet Seho; Obiyathulla Ismath Bacha; Edib Smolo (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...

  • International_financial_integration_through_depositary_receipts_Obiyathullah et al.pdf.jpg
  • Journal Article


  • Authors: Obiyathulla Ismath Bacha; Norhazlina Ibrahim; Mansor H. Ibrahim (2020)

  • The issue of liquidity and underdevelopment of the Organisation of Islamic Cooperation (OIC) stock markets has caused problems to companies in those countries that seek higher equity capital. One way out of this problem is to employ international markets more intensively by seeking cheaper cost of capital through Depositary Receipts (DRs). Many studies on DRs focused on emerging and developed countries, leaving many OIC countries behind. Thus, this study investigates the financial implication by examining the integration of returns of local and foreign stock markets via American Depositary Receipts (ADRs) and Global Depositary Receipts (GDRs) of OIC countries. Techniques employed in t...