Newspaper Article : [9]

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Collection's Items (Sorted by Submit Date in Descending order): 1 to 9 of 9
  • 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...

  • sukuk_innovation_needs_go_further_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2018)

  • Sukuk, which is probably Islamic finance's most popular product, has of late gone through a fair bit of innovation. As opposed to their earlier structures which were nothing but Shariah-compliant straight debt, some of today's sukuk come with a variety of features. Broadly speaking, there are two broad thrusts in the innovation that have taken place. First, the use of embedded options for better risk management/proling. Second, innovation seeking to overcome limitations like the need for physical underlying assets. Though options - especially the exchange-traded variety - are still anathema to a majority of the fuqaha (Shariah scholars) fraternity, their use within sukuk structures ap...

  • shariah_stock_screening_optimal_capital_structure_need_rethink_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2018)

  • The capital structure decision is a highly important one for corporations. Capital structure refers to the combination of debt and equity (and other hybrids) that a company uses to fund itself. Going by finance theory, each corporation has its optimal capital structure. This optimal mix of debt and equity maximises the firm's market value by minimising its weighted average cost of capital. As debt is always cheaper than equity and has a tax shelter advantage, a firm's cost of capital reduces as it uses more debt in lieu of equity. However, risk increases as the proportion of debt increases. It is this trade-off between risk and return/value that gives rise to a minimal point for cost ...

  • 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 ...

  • capital_flows_regulatory_arbitrage_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2018)

  • Events earlier in the year in Australia show the extent to which cross-border capital flows can arbitrage regulatory hurdles. It appears that in an effort to rein in a burgeoning housing bubble, the Australian central bank, the Reserve Bank of Australia (RBA) has placed caps on bank lending to real estate developers. The policy, aimed largely at curbing purchases of Australian homes by foreigners through domestic borrowing, initially was effective. In addition to foreign speculators, domestic housing developers too were hit hard. Such regulation would have essentially taken the wind out of a domestic housing bubble, had it not been for foreign hedge funds and private equity. Given fre...

  • 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...

  • debt_exchange_rate_vulnerability_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2019)

  • Muslim-majority nations like Turkey, Indonesia, Egypt and even Malaysia have seen their currencies depreciate and come under pressure in the recent past. Turkey and Egypt have had to increase domestic interest rates substantially to ease the exchange rate pressure. Indonesia, too, had to raise rates, albeit of a much lower magnitude. The choice of an exchange rate policy - whether pegged, free floating or managed - depends on the trade-off preference. Fixed or pegged exchange rates offer stability, but this has to be traded off against the lack of independence in monetary policymaking. A freely floating currency has the advantage of providing full flexibility in policymaking, but has ...

  • 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.

  • deciphering_political_economy_Malaysia_Ariff.pdf.jpg
  • Newspaper Article


  • Authors: Abdul Kareem, Mohamed Ariff (2018)

  • What is really "new" about New Malaysia? The term "New Malaysia" connotes new thinking, new ideas and new solutions based on a new paradigm. New Malaysia warrants a new mindset, but some pronouncements by politicians, on both sides of the divide, show that they are still unable to delink themselves from the past.

Collection's Items (Sorted by Submit Date in Descending order): 1 to 9 of 9

Newspaper Article : [9]

Follow this collection to receive daily e-mail notification of new additions
Collection's Items (Sorted by Submit Date in Descending order): 1 to 9 of 9
  • 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...

  • sukuk_innovation_needs_go_further_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2018)

  • Sukuk, which is probably Islamic finance's most popular product, has of late gone through a fair bit of innovation. As opposed to their earlier structures which were nothing but Shariah-compliant straight debt, some of today's sukuk come with a variety of features. Broadly speaking, there are two broad thrusts in the innovation that have taken place. First, the use of embedded options for better risk management/proling. Second, innovation seeking to overcome limitations like the need for physical underlying assets. Though options - especially the exchange-traded variety - are still anathema to a majority of the fuqaha (Shariah scholars) fraternity, their use within sukuk structures ap...

  • shariah_stock_screening_optimal_capital_structure_need_rethink_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2018)

  • The capital structure decision is a highly important one for corporations. Capital structure refers to the combination of debt and equity (and other hybrids) that a company uses to fund itself. Going by finance theory, each corporation has its optimal capital structure. This optimal mix of debt and equity maximises the firm's market value by minimising its weighted average cost of capital. As debt is always cheaper than equity and has a tax shelter advantage, a firm's cost of capital reduces as it uses more debt in lieu of equity. However, risk increases as the proportion of debt increases. It is this trade-off between risk and return/value that gives rise to a minimal point for cost ...

  • 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 ...

  • capital_flows_regulatory_arbitrage_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2018)

  • Events earlier in the year in Australia show the extent to which cross-border capital flows can arbitrage regulatory hurdles. It appears that in an effort to rein in a burgeoning housing bubble, the Australian central bank, the Reserve Bank of Australia (RBA) has placed caps on bank lending to real estate developers. The policy, aimed largely at curbing purchases of Australian homes by foreigners through domestic borrowing, initially was effective. In addition to foreign speculators, domestic housing developers too were hit hard. Such regulation would have essentially taken the wind out of a domestic housing bubble, had it not been for foreign hedge funds and private equity. Given fre...

  • 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...

  • debt_exchange_rate_vulnerability_obiyathulla.pdf.jpg
  • Newspaper Article


  • Authors: Bacha, Obiyathulla Ismath (2019)

  • Muslim-majority nations like Turkey, Indonesia, Egypt and even Malaysia have seen their currencies depreciate and come under pressure in the recent past. Turkey and Egypt have had to increase domestic interest rates substantially to ease the exchange rate pressure. Indonesia, too, had to raise rates, albeit of a much lower magnitude. The choice of an exchange rate policy - whether pegged, free floating or managed - depends on the trade-off preference. Fixed or pegged exchange rates offer stability, but this has to be traded off against the lack of independence in monetary policymaking. A freely floating currency has the advantage of providing full flexibility in policymaking, but has ...

  • 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.

  • deciphering_political_economy_Malaysia_Ariff.pdf.jpg
  • Newspaper Article


  • Authors: Abdul Kareem, Mohamed Ariff (2018)

  • What is really "new" about New Malaysia? The term "New Malaysia" connotes new thinking, new ideas and new solutions based on a new paradigm. New Malaysia warrants a new mindset, but some pronouncements by politicians, on both sides of the divide, show that they are still unable to delink themselves from the past.

Collection's Items (Sorted by Submit Date in Descending order): 1 to 9 of 9