Islamic Banking & Finance 2014 Conference Programme

Islamic Banking & Finance 2014 Conference Programme

23rd - 24th June 2014 Ashton Memorial, Lancaster

08.30 — 09.30

Conference Registration and Distribution of Material

Welcoming Talk Professor Sue Cox

Dean of Lancaster University Management School

Keynote Speech Professor Thorsten Beck

Welcoming Talk Professor Omneya Abdelsalam

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Lecture Theatre 1

10.40 — 11.00

Lecture Theatre 1

09.50 — 10.40

Lecture Theatre 1

09.30 — 09.50

11.30 — 13.00

Do Islamic Banks Live Free and Die Young? (ID 254) Pappas,Vasileios; Ongena, Steven; Izzeldin, Marwan; Fuertes, Ana-Maria Finance-Growth Nexus and Dual Banking System: Relative Importance of Islamic Banks. (ID 252) Abedifar, Pejman; Hasan, Iftekhar; Tarazi, Amine

Lecture Theatre 3

Session M1: Banking Session Chair: Hasan, Iftekhar

Session P1: Asymmetric Information Session Chair: Tariq, Wijdan

Gharar and Mispricing of Equity Warrants. Malaysian Evidence. (ID 182) Haron, Razali Effects of Asymmetric Information on Syndicate Structure in the Syndicated Islamic Financing Market: Empirical Evidence. (ID 200) Tariq, Wijdan

Lecture Theatre 6

Asymmetric Information and Islamic Financial Contracts: Theoretical Discussion. (ID 219) Benamraoui, Abdelhafid

Session P2: Financial Development Session Chair: Jusoh, Hashim

On the Absorption of Financial Services in an Islamic Environment. (ID 228) Mertzanis, Charilaos

Lecture Theatre 9

Financial Development and Economic Growth: Does Islamic Bank Financing Contribute to Economic Growth: The Malaysian Case. (ID 133) Ben Amar, Amine; Hachicha, Nejib

Evaluation of Monetary Policy: - Evidence of the Role of Money from Malaysia. (ID 214) Ouatik el Alaoui, AbdelKader; Jusoh, Hashim; Krichene, Noureddine; Ismail, Abdul Ghafar Session P3: Risk Session Chair: Alswaidan, Mohammed

Risk Management in Islamic Trade Finance. (ID 113) Gundogdu, Ahmet Suayb Risk Sharing in Islamic Finance: Recent Trends and Development. (ID 126) Mohammden, Sadiq; Alswaidan, Mohammed; Daynes, Arief; Pasgas, Paraskevas

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Lecture Theatre 10

Market Discipline in Banking; Islamic vs. Conventional Banks. (ID 166) AlAbbad, Amal Essa

Lecture Theatre 3

14.00 — 15.30 Session M2: Sukuk & Student Loans Session Chair: Dawson, Paul Edward What Influences Stock Market Reaction to Sukuk Issues? The Impact of Scholars and Sukuk Types.

(ID 130) Godlewski, Christophe; Turk-Ariss, Rima; Weill, Laurent Shariah-Compliant Student Funding: A Proposal. (ID 236) Dawson, Paul Edward

Lecture Theatre 6

Session P4: Islamic Funds I Session Chair: Deepa Bannigidadmath Is There a Diversification “Cost” of Shariah Compliance? Empirical Evidence from Malaysian Equities. (ID 127) Mustaffa Kamil, Nazrol Kamil; Bacha, Obiyathulla Ismath; Masih, Mansur Sukuk Issuance and its Regulatory Framework in Saudi Arabia. (ID 221) Alshamrani, Ali Saeed Do Financial News Predict Stock Returns? New Evidence from Islamic and Non-Islamic Stocks. (ID 304) Deepa Bannigidadmath

Lecture Theatre 9

Session P5: Banking & Finance Session Chair: Hanif, Muhammad Efficiency and its Determinants in Banks: A Comparative Study of Islamic, Conventional and Socially Responsible Banks. (ID 238) Alharthi, Majed; El-Masry, Ahmed Fair Value and Banking Contagion: Empirical Evidence from Islamic and Conventional Banking Sectors in GCC Region. (ID 112) Gharbi, Leila Risk and Returns in Shariah Compliant Cross-section Stocks: Evidence from an Emerging Market.

(ID 151) Hanif, Muhammad; Iqbal, Abdullah; Shah, Zulfiqar

Lecture Theatre 10

Session P6: Conceptual I Session Chair: Hanifa, Mohamed Hisham Islamic Law of Business Organizations: Islamic Finance – Building a House Without Setting the Foundations. (ID 161) Raja, Khurram Parvez Islamic Economic Values and their Relation to the Egyptian Revolution Demands. (ID 162) Ata, Sahar Testing Sukuk and Conventional Debt Security Offers Based on Corporate Financing Theories Using Partial Adjustment Models: Evidence from the Malaysian Listed Firms. (ID 170) Hanifa, Mohamed Hisham; Masih, Mansur; Bacha, Obiyathulla I. Page 4

16.00 — 17.30

Board Structure and Risk-taking: Islamic vs. Conventional Banks. (ID 137) Mollah, Sabur; Skully, Michael A Conceptual Analysis of Longevity Risk from the Conventional and Islamic Finance Perspectives. (ID 241) Manjoo, Faizal Ahmad

Lecture Theatre 3

Session M3: Financial Risk & Stability I Session Chair: Manjoo, Faizal Ahmad

Session P7: Microfinance Session Chair: El-Bassiouny, Noha

Demand for Islamic Micro Financing among the Urban Micro Entrepreneurs in Malaysia. (ID 232) Hassan, Salwana; Abdul Rahman, Rashidah An Investigation of Consumer Choices and Attitudes toward Islamic Micro-credit Products in the Egyptian Market (ID 208) Raghda El Ebrashi; Ahmed Ibrahem Mosa; Noha El Bassiouny; Rania Salem; Imane Helmy

Lecture Theatre 6

An Islamic Microfinance Business Model in Bangladesh and its Role in Poverty Alleviation (ID 237) Hassan, Abul

Session P8: Islamic Equity Indices I Session Chair: Hayat, Raphie

The Ethical Screening and Compliance Information Disclosure Practices of Islamic Equity Funds. (ID 142) Abdul Halim, Zairihan

Lecture Theatre 9

Long Run Asymmetric Relationships between Islamic and Conventional Equity Indices. (ID 244) Alexakis, Christos; Pappas, Vasileios; Tsikouras, Alexandros

Do Stock Returns React to an Islamic Label? (ID 184) Hayat, Raphie; De Anca, Celia Session P9: Regulation Session Chair: Kok, Seng Kiong

Islamic Banks, Deposit Insurance Reform, and Market Discipline: Evidence from a Natural Framework. (ID 222) Disli, Mustafa; Aysan, Ahmet Faruk; Duygun, Meryem; Ozturk, Huseyin Governance and Regulation in Islamic Finance: On the Ground with Market Participants. (ID 144) Kok, Seng Kiong; Giorgioni, Gianluigi Page 5

Lecture Theatre 10

What Drives Profitability of Banks: Do Interest Rate and “Fee and Commissions” Impact the Profitability of Banks? Evidence from European Countries. (ID 216) Ouatik el Alaoui, AbdelKader; Diwandaru, Ginanjar; Rosly, Saiful Al Azhar; Masih, Mansur; Hisham, Mohamed

Lecture Theatre 3

09.30 — 11.30 Session M4: Islamic Equity Indices II Session Chair: Malik, Rizwan Price and Volume Effects of the Dow Jones Islamic Market World Index Revisions. (ID 149) Mazouz, Khelifa; Mohmed, Abdulkadir; Saadouni, Brahim Testing the Conventional & Islamic Financial Market Contagion: Evidence from Wavelet Analysis. (ID 165) Saiti, Buerhan; Ismath Bacha, Obiyathulla; Masih, Mansur

Lecture Theatre 6

Incorporating Socially Responsible Investment Principles in Islamic Equity Investments. (ID 181) Malik, Rizwan; Nurullah, Mohamed; Dar, Humayon Session P10: Financial Crisis Session Chair: Fedi Kalai Islamic Banking and Asset Price Bubbles. (ID 186) Azmat, Saad; Ghaffar, Hamza; Azad, Sohel Financial Deepening and Financial Crises in the Context of Islamic Finance. (ID 198) Ata, Sahar Risk Mutualization in Islamic Banking. (ID 202) Jean-Baptiste, Desquilbet; Fedi Kalai; Maxence Miéra

Lecture Theatre 9

Session P11: Accounting Quality and Shariah Supervisory Boards Session Chair: Kasim, Nawal Accounting Quality and Political Connections in Banks: Evidence from MENA Countries. (ID 227) Abdelsalam, Omneya; Dimitropoulos, Panagiotis; Leventis, Stergios Exploring and Critical Insights towards SSB Report for Islamic Banks and its Link with Financial Performance Level. (ID 173) Hussainey, Khaled; El-Halaby, Sherif Reforming Accountability towards Internal Shariah Review Quality in Islamic Financial Institutions: A Proposed Framework. (ID 174) Kasim, Nawal; Mohamad, Mohd Nizam; Abdul Rahman, Rashidah

Lecture Theatre 10

Session P12: SME Financing Session Chair: Mohammed, Kerbouche The Nexus between Informal Credit and Informal Labor for Micro and Small Enterprises in Egypt.

(ID 251) Said, Mona; El Komi, Mohamed Role of Waqf in Financing SMEs: A Perspective from Kuwait. (ID 246) Jones, Dr. Tracy; Hussainey, Khaled; Alhabashi, Khaled; Sefiani, Yassine The Role of Islamic Banks in Financing Algerian Small &Medium Sized Enterprises in Algeria “Empirical Study”. (ID 220) Mohammed, Kerbouche; Abdennour, Belmimoun; Fatima, Bouhelal Page 6

11.30 — 13.00

The Puzzle of Uniform Standards and Market Segmentation among Islamic Banks. (ID 203) Berg, Nathan; El-Komi, Mohamed; Kim, Jeong-Yoo Investor’s Choice of Shariah Compliant ‘Replicas’ and Original Islamic Instruments. (ID 157) Azmat, Saad; Jalil, Naiman; Skully, Michael; Brown, Kym

Lecture Theatre 3

Session M5: Behavioral Finance I Session Chair: Skully, Michael

Session P13: Sukuk Session Chair: Abdul Halim, Zairihan

Does a Held-to-Maturity Strategy Impede Effective Portfolio Diversification for Islamic Bond (Sukuk) Portfolios? A Multi-Scale Continuous Wavelet Correlation Analysis. (ID 152) Najeeb, Syed Faiq; Bacha, Obiyathulla Ismath; Masih, Abul Mansur

Lecture Theatre 6

Asset Generated Sukuk Managed by Independent Asset Manager: A Case Study for a Sukuk Mudaraba (Asset Finance) Applied to a French SME. (ID 194) Patel, Anass

Capital Market Imperfections and Corporate Sukuk Issuance (ID 146) Abdul Halim, Zairihan; How, Janice; Nainggolan, Yunieta; Verhoeven, Peter Session P14: Performance of Banks Session Chair: Abdul Kader Malim, Nurhafiza

Financial Performance Analysis of Islamic Banks with Multilevel Interior Growing Self-organizing Maps. (ID 250) Kessentini, Mouna; Ayadi, Thouraya; Jeffers, Esther; Alimi, Adel

Lecture Theatre 9

Global Evidence on Financial Stability during the Credit Crunch: Did it Matter for Islamic banks?

(ID 229) Abdelsalam, Omneya; Elnahass, Marwa

Financial Intermediation Costs in Islamic Banks: The Role of Bank-specific, Market-specific and Institutional-Governance Factors. (ID 180) Abdul Kader Malim, Nurhafiza; Ibrahim, Mansor; Mohd Rasid, Mohamed Eskandar Shah Session P15: Islamic Premium Session Chair: Gavriilidis, Konstantinos

Islamic Calendar Anomalies: Evidence from Pakistani Firm-Level Data. (ID 134) Halari, Anwar; Tantisantiwong, Nongnuch; Power, David; Helliar, Christine Herding and the Ramadan Effect. (ID 128) Gavriilidis, Konstantinos; Kallinterakis, Vasileios; Tsalavoutas, Ioannis

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Lecture Theatre 10

IIBR-LIBOR Relationship and the Nature and Determinants of “Islamic Premium”. (ID 185) Azad, ASM Sohel; Ahsan, Amirul; Azmat, Saad; Fang, Victor

14.00 — 15.30

Lecture Theatre 3

Session M6: Efficiency of Banks Session Chair: Johnes, Jill Asset-Liability Management in Islamic Banks: Evidence from Emerging Markets Using Canonical Correlation Analysis. (ID 150) Abou-El-Sood, Heba; El-Ansary, Osama Examining the Relationship between Default Risk and Efficiency in Islamic and Conventional Banks. (ID 255) Momna Saeed; Marwan Izzeldin

Lecture Theatre 6

Convergence in Banking Efficiency: A Comparison of Islamic and Conventional Banks Using a Random Parameter Estimation Model. (ID 231) Johnes, Jill; Izzeldin, Marwan; Pappas, Vasileios; Tsionas, Mike Session P16: Conceptual II Session Chair: El-Halaby, Sherif Social Responsibility in Qur’an: Toward a Moral Individual Responsibility Framework. (ID 224) Helfaya, Akrum Nasr Ekara; Kotb, Amr; Abdelzaher, Dina The Incorporation of Hisbah as a Legal Channel Profits in Islamic Financial Transaction. (ID 175) Al Shugaa, Ameen Ali A Holistic Framework for Islamic Accountant Model and its Value to Investors. (ID 164) El-Halaby, Sherif; Hussainey, Khaled

Lecture Theatre 9

Session P17: Behavioral Finance II Session Chair: Albarrak, Mansour S. Islamic Banking Premium: Signalling, Piety or Both? (ID 204) Avdukic, Alija; Berg, Nathan; El-Komi, Mohamed How In-Group Trust Affects Financial Relations for Muslims. (ID 211) Banuri, Sheheryar; El-Komi, Mohamed Is the Capital Structure of Islamic Banks Different? A Comparative Study with Conventional Banks in MENA Countries. (ID 217) El-Masry, Ahmed; Albarrak, Mansour S.

Lecture Theatre 10

Session P18: Financial Risk & Stability II Session Chair: Daher, Hassan Youssef To Debt or Not to Debt: Are Islamic Banks Less Risky than Conventional Banks? (ID 234) Sorwar, Ghulam; Vasileios, Pappas; Pereira, John; Nurullah, Mohamed Relationship between Capital, Profitability, and Risk in Islamic Bank. (ID 223) Fatnassi, Ibrahim; Souid, Khawla; Hasnaoui, Habib; Ben Maatoug, Abderrazek The Unique Risk Exposures of Islamic Banks’ Capital Buffers: A Dynamic Panel Data Analysis. (ID 154) Daher, Hassan Youssef; Masih, Mansur M.; Ibrahim, Mansor H. Page 8

16.00 — 17.30 Session M7: Stock Markets Session Chair: Dewandaru, Ginanjar

Leverage versus Volatility: Evidence from the Capital Structure of European Firms. (ID 195) Ouatik el Alaoui, AbdelKader; Obiyathulla, Ismath Bacha; Masih, Mansur; Asutay, Mehmet The Role of Islamic Asset Classes in the Diversified. (ID 172) Ginanjar Dewandaru; Masih, Rumi; Masih, Mansur; Ismath Bacha, Obiyathulla

Lecture Theatre 3

The Role of Islamic Asset Classes in the Diversified Portfolios: Mean Variance Spanning Test. (ID 215) Ginanjar Dewandaru; Rumi Masih; Obiyathulla Ismath Bacha; A. Mansur M. Masih

Session P19: Islamic Equity Indices III Session Chair: Jusoh, Hashim Bin

How do Macroeconomic Changes Impact Islamic and Conventional Equity Prices? Evidence from Developed and Emerging Countries. (ID 159) Dewandaru, Ginanjar; Rizvi, Syed Aun R.; Sarkar, Kabir; Bacha, Obiyathulla I.; Masih, Mansur Multi-scale Lead-Lag Relationship between the Stock and Futures Markets: Malaysia as a Case Study. (ID 163) Jusoh, Hashim Bin; Ismath Bacha, Obiyathulla; Mohammed Masih, Abdul Mansur

Lecture Theatre 6

Evaluating Performance of Value-at-Risk Models for MENA Islamic Equity Market. (ID 249) Ben Ayed, Wassim; Ben Maatoug, Abderrazak; Fatnassi, Ibrahim

Session P20: Islamic Funds II Session Chair: Alhabashi, Khaled

Role of ‘Qard Hassan’ in Financing SMEs: A Perspective from Kuwait. (ID 245) Jones, Dr. Tracy; Hussainey, Khaled; Alhabashi, Khaled; Sefiani, Yassine

Lecture Theatre 9

Active Management and Mutual Fund Performance: A Comparison of Islamic and Socially Responsible Funds. (ID 138) Abdelsalam, Omneya; Duygun, Meryem; Matallín-Sáez, Juan Carlos; Tortosa-Ausina, Emili

Ethical Screening and Financial Performance: The Case of Islamic Equity Funds. (ID 141) Nainggolan, Yunieta Anny; How, Janice; Verhoeven, Peter Session P21: Miscellaneous Session Chair: Khallaf, Ashraf

Bank Profitability and the Business Cycle: Are Islamic Banks More Stable? (ID 158) Husman, Jardine Corporate Governance and Bank Operating Performance in Islamic and Conventional Banks: Evidence from GCC. (ID 139) Chazi, Abdelaziz; Khallaf, Ashraf Page 9

Lecture Theatre 10

The Impact of Crude Oil Price on Islamic Stock Indices of South East Asian (SEA) Countries: A Comparative Analysis. (ID168) Abdullah, Ahmad Monir; Saiti, Buerhan; Masih, Mansur

Monday, 23rd June, 2014 Session M1: Financial Development Location: LUMS Lecture Theatre 3

Time: 11.30-13.00

Do Islamic Banks Live Free and Die Young? (ID 254)

Pappas,Vasileios; Ongena, Steven; Izzeldin, Marwan; Fuertes, Ana-Maria

Are Islamic banks inherently more stable than conventional banks? This question is addressed by comparing estimates of (un)conditional hazard rates for the two types of banks. For this purpose, we employ duration models that take into account both the occurrence of and the time-to-failure of 421 banks in 20 countries in the period 1995 - 2010. We find that Islamic banks have a significantly lower risk of failure both unconditionally and conditionally on time-varying bank characteristics, market structure and macroeconomic conditions. The enhanced survival rates of Islamic banks are more strongly tied than those of conventional peers to their own liquidity position, leverage, banking sector concentration and macroeconomic conditions. The design and implementation of early warning systems of bank failure should therefore recognize the distinct risk profiles of the two bank types.

Finance-Growth Nexus and Dual Banking System: Relative Importance of Islamic Banks. (ID 252) Abedifar, Pejman; Hasan, Iftekhar; Tarazi, Amine

This paper investigates whether the coexistence of Islamic banks alongside conventional banks has any significant influence on the quantitative and qualitative development of the banking system and economic welfare. In other words, it inquires the impact of the presence Islamic banks - alongside conventional banks – financial development (access to finance e.g., saving mobilization and growth of private credit), economic growth (gross national index and new business formation), income inequality (GINI index and poverty alleviation). It also explores the possible impact of Islamic banking presence on the performance of conventional banks (credit risk, cost efficiency and profitability).

Session P1: Asymmetric Information Time: 11.30-13.00 Location: LUMS Lecture Theatre 6 Asymmetric Information and Islamic Financial Contracts: Theoretical Discussion. (ID 219) Benamraoui, Abdelhafid

The issue of asymmetric information and its direct effect on conventional financial contracts is widely investigated in the finance literature. However, limited attention has been paid to the impact of asymmetric information on Islamic based financial contracts. Therefore, this research paper aims to shed light on the relevance of asymmetric information to the two main Islamic financial contracts, Murabaha and Musharaka.

The article also discusses the issue of gharar and the main theories that can be applied to deal with asymmetric information in an Islamic finance context. The analysis presented in this research paper suggests that Islamic financial contracts are subject to different level of asymmetric information including the element of gharar at both the ex-ante and ex-post stages of the lending process. The paper draws on theoretical discussions to provide solutions to the adverse selection and moral hazard related problems.

Gharar and Mispricing of Equity Warrants. Malaysian Evidence. (ID 182) Haron, Razali

The use of derivatives as risk management instrument has accelerated rapidly where financial instruments like option, forward, future and swaps have been widely used to manage risks. Despites its extensive usage, the use of derivatives as risk management receives differing arguments among the Muslim scholars. Focusing on the use of option contract, despites its economic benefits of hedging activities they are also used for speculative purposes that contravene with the maqasid al Shariah. Options are also objected to because of the payment of a premium, and conditional options are not allowed in currency exchanges. Options are also accused of containing the element of gharar which is prohibited in fiqh muamalat. Therefore, the objective of

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this study is to investigate the existence of one of the prohibited elements which is gharar in one of the financial innovations in derivatives family which is equity warrants contract since most Islamic scholars reject the conventional warrants on the basis of gharar and that warrants are transacted for speculative gains. This study examined the existence of gharar element in equity warrants pricing especially in the case of mispricing by employing the Black Scholes Option Pricing Model (BSOPM) on 73 equity warrants listed on Bursa Malaysia for the period of 2006-2012.

Effects of Asymmetric Information on Syndicate Structure in the Syndicated Islamic Financing Market: Empirical Evidence. (ID 200) Tariq, Wijdan

The syndicated Islamic finance market is a significant source of corporate borrowing; the volume of Islamic syndications during the years 2002-2013 is estimated to be over $200 billion, as compared to the popular sukuk market which saw issuances of over $600 billion during the same period. While extensive research has been done on information asymmetry in conventional syndicated financing deals, its Islamic counterpart has hardly been the subject of any empirical analysis. This is surprising given the growth of this market. More importantly, even though the role of information asymmetry in Islamic financing arrangements is widely acknowledged, there is little existing evidence that shows how Islamic banks manage information problems in financial transactions and to what extent information frictions affect their financing arrangements. The aim of this paper therefore is to apply the theory of financial intermediation from an economics of imperfect information perspective to empirically analyse this growing segment of the international financial markets.

Session P2: Financial Development Time: 11.30-13.00 Location: LUMS Lecture Theatre 9 Financial Development and Economic Growth: Does Islamic Bank Financing contribute to Economic Growth: The Malaysian Case. (ID 133) Ben Amar, Amine; Hachicha, Nejib

Does Islamic Finance influence growth? The aim of this paper is to investigate empirically the impact of the Islamic Bank Financing on Malaysia’s economic growth over the period 2000Q1-2011Q4. The hypotheses addressed in this study are discussed within the framework of Demirgßç-Kunt & Levine/Chapra approach and the analysis of the Islamic Banking system. A neoclassical production function augmented by some indicators of the Islamic bank financing has been the theoretical framework of our empirical investigations. In the short-run, the estimation of an Error-Correction Model of the GDP in Malaysia has shown that the various indicators of Islamic financing growth elasticity are estimated to be around 0.35. In the long-run, this elasticity varies between 0.14 and 0.20.

On the Absorption of Financial Services in an Islamic Environment. (ID 228) Mertzanis, Charilaos

The paper will discuss policy issues regarding the marketing of and access to financial services in an Islamic environment. It will discuss the type of financial services, the globalization trends of financial services and the challenges thereby posed, the marketing issues that are important in the financial services business area, the elements of a successful financial services access policy, and the role of financial regulation. More specifically the paper will analyze the full range of financial services (banking, investments, insurance), and distinguish them between those oriented to consumers, those internal to financial institutions and those related to sales and promotion. It will then consider international developments (deregulation, technology, homogeneity of market reaction, competition, conglomeration etc.) that have resulted in the global expansion of both financial services and customer needs. It will analyze efforts of intermediaries to market financial services as well as the directions for marketing effort, including the use of advisory groups and committees and the associated encounters with consumer groups. It will outline the stages of an effort to effectively market and promote financial services in major financial centers, by discussing issues of communication, networking, management, pricing, strategy and technology. Then, it will discuss the role of financial regulators, the Government and other participants groups. It will discuss the current trends and transforming objectives of financial regulation and expound whether and how regulation can actually aid the marketing of financial services in different socioeconomic environment, through market integrity. Finally, it will discuss the various Islamic financial

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instruments and their differences from convention ones, the reaction of consumers as between the different financial instruments and the socio-economic reasons for that, highlighting the role of cultural values.

Evaluation of Monetary Policy: Evidence of the Role of Money from Malaysia. (ID 214) Ouatik el Alaoui, AbdelKader; Jusoh, Hashim; Krichene, Noureddine; Ismail, Abdul Ghafar

The paper will discuss policy issues regarding the marketing of and access to financial services in an Islamic environment. It will discuss the type of financial services, the globalization trends of financial services and the challenges thereby posed, the marketing issues that are important in the financial services business area, the elements of a successful financial services access policy, and the role of financial regulation. More specifically the paper will analyze the full range of financial services (banking, investments, insurance), and distinguish them between those oriented to consumers, those internal to financial institutions and those related to sales and promotion. It will then consider international developments (deregulation, technology, homogeneity of market reaction, competition, conglomeration etc.) that have resulted in the global expansion of both financial services and customer needs.

Session P3: Risk Time: 11.30-13.00 Location: LUMS Lecture Theatre 10 Market Discipline in Banking; Islamic vs. Conventional Banks. (ID 166) AlAbbad, Amal Essa

This paper empirically examines the existence of market discipline in Islamic banking and whether it is higher/lower than conventional banks. Unlike demand deposits and other products, there is a strong element of risk sharing on Islamic banking. How do these elements fit within market discipline theory?The structure of profit sharing investment accounts, PSIA, that dominate deposit side of Islamic banks could be a source of excessive risk taking by bank managers. However, the residual equity nature of PSIA might increase depositors’ incentives to monitor and discipline banks, which in turn restrict banks from taking an excessive risk. On the other side, the equity nature and higher risk of banks’ asset might also make depositors’ return at risk which in turn increase the likelihood of bank runs.

Risk Management in Islamic Trade Finance. (ID 113) Gundogdu, Ahmet Suayb

Islamic trade finance, though not matured yet, came to a stage, as practiced, which necessitates careful review of different range of products for export and import financing. This paper propose categorizing, from risk management point of view, Islamic trade finance products for asset based&backed and sub categories of export&imports. Each cluster of products would necessitate specific risk measures to be taken for healthy management of lending and borrowing processes. Asset based Murabaha requires transfer of ownership simultaneously from supplier to financier and from financier to the beneficiary of loan. Hence, risk management practices would be similar to conventional lending. Asset backed Murabaha, on the other hand, necessitates holding ownership of the goods financed and gives rise to certain risk to be managed. This paper highlights the risk areas for asset based&backed Murabaha and give insight to handle risk associated with processes shaped by underlying Islamic trade finance contract.

Risk Sharing in Islamic Finance: Recent Trends and Development. (ID 126) Mohammden, Sadiq; Alswaidan, Mohammed; Daynes, Arief; Pasgas, Paraskevas

Islamic trade finance, though not matured yet, came to a stage, as practiced, which necessitates careful review of different range of products for export and import financing. This paper propose categorizing, from risk management point of view, Islamic trade finance products for asset based&backed and sub categories of export&imports. Each cluster of products would necessitate specific risk measures to be taken for healthy management of lending and borrowing processes. Asset based Murabaha requires transfer of ownership simultaneously from supplier to financier and from financier to the beneficiary of loan. Hence, risk management practices would be similar to conventional lending. Asset backed Murabaha, on the other hand, necessitates holding ownership of the goods financed and gives rise to certain risk to be managed. This paper highlights the risk areas for asset based&backed Murabaha and give insight to handle risk associated with processes

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shaped by underlying Islamic trade finance contract.

Session M2: Sukuk & Student Loans Time: 14.00-15.30 Location: LUMS Lecture Theatre 3 What Influences Stock Market Reaction to Sukuk Issues? The Impact of Scholars and Sukuk Types. (ID 130) Godlewski, Christophe; Turk-Ariss, Rima; Weill, Laurent

Sukuk, the shari’a-compliant alternative mode of financing to conventional bonds, have considerably expanded over the last decade. We analyze the stock market reaction to two key features of sukuk: type and characteristics of the shari’a scholar certifying the issue. We use the event study methodology to measure abnormal returns for a sample of 131 sukuk from eight countries over the period 2006-2013 and find that Ijara sukuk structures exert a positive influence on the stock price of the issuing firm. We observe a similar positive impact from shari’a scholar reputation and proximity to issuer. Overall our results support the hypotheses that the type of sukuk and the choice of scholars hired to certify these securities matter for the market valuation of the issuing company.

Shariah-Compliant Student Funding: A Proposal. (ID 236) Dawson, Paul Edward

The issue of sharia-compliant student funding is not trivial. Many student funding systems around the world are based on students borrowing money which is repaid with interest and thus prohibited under Islamic finance principles. According to Pew Research Centre (2011) “if current trends continue, Muslims will make up 26.4% of the world’s total projected population of 8.3 billion in 2030, up from 23.4% of the estimated 2010 world population of 6.9 billion.” In this paper, we present a radical and sharia-compliant alternative to both the existing system and the UK government’s proposed alternative. It is capable of being implemented globally and at undergraduate and post-graduate level, although for the purposes of this paper, we shall present it in the context of UK undergraduate education.

Session P4: Islamic Funds I Time: 14.00-15.30 Location: LUMS Lecture Theatre 6 Is There a Diversification “Cost” of Shariah Compliance? Empirical Evidence from Malaysian Equities.

(ID 127) Mustaffa Kamil, Nazrol Kamil; Bacha, Obiyathulla Ismath; Masih, Mansur

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 employ a number of methods, namely construction of efficient frontiers, time-varying maximum Sharpe ratios, MGARCH-DCC and analysis of covariance (ANCOVA), to offer empirical evidence that such a conceived portfolio diversification “penalty” is far from a foregone conclusion, at least empirically. Our results show that Islamic portfolios are not invariably handicapped in terms of portfolio diversification. We also explored dimensions which may account for differences in relative investment performance between Islamic and conventional portfolios such as portfolio constraints, length of investment horizon and market conditions. We believe this paper is among the first to apply substantial empirical analysis of the portfolio diversification perspective on Islamic equity investments.

Sukuk Issuance and its Regulatory Framework in Saudi Arabia. (ID 221) Alshamrani, Ali Saeed

This article aims to give a comprehensive and critical review of sukuk issuance in Saudi Arabia, and the extent to which the issuance of sukuk in Saudi Arabia is consistent with Shariah requirements. The article is divided into two sections. Accordingly, the first section of this article begins with an examination of sukuk in general, and includes the concept of sukuk, the basic principles of sukuk, common types of sukuk, and a critical analysis of the most important differences between sukuk and conventional bonds. The second section gives a critical analysis of how sukuk work in Saudi Arabia, offering the regulatory framework of the issuance of sukuk

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in the KSA, and the legal challenges from Shariah point of view, and provide recommendations to overcome these challenges.

Does Financial News Predict Stock Returns? New Evidence from Islamic and Non-Islamic Stocks. (ID 304) Deepa Bannigidadmath

This article aims to give a comprehensive and critical review of sukuk issuance in Saudi Arabia, and the extent to which the issuance of sukuk in Saudi Arabia is consistent with Shariah requirements. The article is divided into two sections. Accordingly, the first section of this article begins with an examination of sukuk in general, and includes the concept of sukuk, the basic principles of sukuk, common types of sukuk, and a critical analysis of the most important differences between sukuk and conventional bonds. The second section gives a critical analysis of how sukuk work in Saudi Arabia, offering the regulatory framework of the issuance of sukuk in the KSA, and the legal challenges from Shariah point of view, and provide recommendations to overcome these challenges.”

Session P5: Banking and Finance Time: 14.00-15.30 Location: LUMS Lecture Theatre 9 Efficiency and its Determinants in Banks: A Comparative Study of Islamic, Conventional and Socially Responsible Banks. (ID 238) Alharthi, Majed; El-Masry, Ahmed

This study examines the efficiency and its determinants in Islamic (IBs), conventional (CBs) and socially responsible banks (SRBs) across the world during the period 2005-2012. Input-output efficiency measures (Scale Efficiency (SE), Technical Efficiency-Constant-Returns-to-Scale (TE-CRS) and Technical EfficiencyVariable-Returns-to-Scale (TE-VRS)) were estimated using Data Development Analysis (DEA) method then Ordinary Least Square, Fixed-Effects, Random-Effects and Tobit regression models were run to test for the efficiency determinants. The main findings indicate that the average efficiency is 0.973, 0.953 and 0.983 for SE, TE-CRS and TE- VRS, respectively. However, the results show that the most efficient banks are the socially responsible banks (SRBs).

Fair Value and Banking Contagion: Empirical Evidence from Islamic and Conventional Banking Sectors in GCC Region. (ID 112) Gharbi, Leila

Since the onset of the subprime crisis, fair value accounting has prompted heated debate especially with regard to financial instruments. It has been alleged that fair value is the origin of devastating pro-cyclical effects in times of crisis which can lead to contagion. In this study, we aim to explore empirically the impact of fair value accounting on banking contagion in a comparative context between Islamic banks and conventional banks. This study covers 20 Islamic banks and 40 conventional banks during 9 years from 2003 to 2011 in the Gulf Cooperation Council (GCC) countries. Findings prove that fair value accounting is positively associated with an increase of banking contagion for the full sample. However, unexpectedly, it is observed that fair value changes amplify banking contagion for both Islamic and conventional banking sectors in the same way.

Risk and Returns in Shariah Compliant Cross-section Stocks: Evidence from an Emerging Market. (ID 151) Hanif, Muhammad; Iqbal, Abdullah; Shah, Zulfiqar

Islamic banking and finance industry is expanding world over with an unprecedented growth. Global volume of Shari’a compliant assets have reached to a level of US $ 1,460/- Billion by the end of 2012, displayed growth of 19% during the year 2011 and 21% during year 2010. To address the issue of investment in marketable equities (which are primarily based on profit and loss sharing principle) Shari’a screening filters have been developed and we have at least ten Islamic Indexes operating worldwide. In Pakistan KSE-Meezan Index (KMI-30) was launched in 2008. This study is intended to understand and document the impact of market index on pricing of Shari’a Compliant securities and explain variations in stock returns on Karachi Stock Exchange (KSE); and also includes the testing of the impact of size, book to market (B/M), price to earnings (PER), cash flow yield (CFY) and momentum in variation of stock returns to confirm robustness of earlier studies conducted globally, in return mechanism on a special Sample of Shari’a compliant companies on ten

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years monthly data from 2001 to 2010.

Session P6: Conceptual I Time: 14.00-15.30 Location: LUMS Lecture Theatre 10 Islamic Law of Business Organizations: Islamic Finance – Building a House without Setting the Foundations. (ID 161) Raja, Khurram Parvez

The aim of this study is to explore Islamic commercial law, which was little studied until recently and has remained relatively inaccessible, neglected and under-researched. The study highlights the inadequacies of the modern corporation. It seeks to explore: In whose interest and for whose benefit should the Islamic corporation be governed? Why Islamic commercial law has failed to Islamize the modern corporation based on the binding principles of Sharia? These are the central questions towards which this study is directed. An application of the fundamental binding principles of Islamic commercial law will only guarantee the protection of stakeholders of the corporation.

Islamic Economic Values and their Relation to the Egyptian Revolution Demands. (ID 162) Ata, Sahar

The Objective of the research is to compare the Islamic Economic Principals to the Revolution Demands. Explain, compare and find out how applying Islamic Finance can help meet the Revolution Requests and would result in Economic Growth. Second Objective is to analyse the market and its readiness to introduce Islamic Finance. The Third Objective is to review Role different institutions should play to make sure that Islamic Finance is going to be successful, also to find out the prospects of Islamic Finance growth in Egypt in relation to the political changes and the rise of the Muslim Brotherhood to power. Islamic finance is a system that can help the unbaked to be included in the financial system if Islamic Finance is applied correctly in the first place, if it is applied correctly it will help in answering the revolution calls as it will lead to Economic growth.

Testing Sukuk And Conventional Debt Security Offers Based on Corporate Financing Theories Using Partial Adjustment Models: Evidence from the Malaysian Listed Firms. (ID 170) Hanifa, Mohamed Hisham; Masih, Mansur; Bacha, Obiyathulla I. Sukuk (Islamic debt securities) are dominating the Malaysian capital market with strong support from the government, mega-conglomerates and firms. Sukuk, as an important source of firms’ financing, are increasingly catching up with the conventional bonds in terms of volume of transactions and number of sukuk issuances. The objective of this paper is to make the first attempt to estimate whether the firms engage in target optimizing behavior and investigate the determinants of firms’ target debt ratio in issuing sukuk and conventional debt principles together with its respective sub-categories . The question of optimality forms an important basis to draw conclusions based on which corporate financing theories could ultimately explain firms’ actual financing decision. Theoretically, the existence of optimal target debt ratio must balance the benefits (e.g. debt tax shields) and costs (e.g. financial distress and/or agency problems) of debt.

Session M3: Financial Risk and Stability Location: LUMS Lecture Theatre 3

Time: 16.00-17.30

Board Structure and Risk-taking: Islamic vs. Conventional Banks. (ID 137) Mollah, Sabur; Skully, Michael

This paper examines whether variations in board structure may explain differences between Islamic and conventional banks in risk-taking. From an analysis of a matched pair sample of 172 Islamic and conventional banks from 25 countries over the period of 2005-2011, board structure does seem associated with the Islamic banks lower risk-taking. Particularly, the Islamic bank boards mitigate risk-taking while interacts with powerful CEOs, which, in turn, help distinguish Islamic banks from the conventional banks.

A conceptual analysis of longevity risk from the conventional and Islamic finance perspectives. (ID 241) Manjoo, Faizal Ahmad

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One of the biggest problems that the world has to address in the 21st century is the issue of ageing populations.

Based on the forecast of the United Nations and other researches done, the world will have more elderly people than young people by 2045 (United Nations, World Population Ageing, 2009). The aims of this paper are threefold: (1) To explore the concept and causes of the growing ageing population and the longevity risk associated with it, both in the Muslim world and other countries, in particular the OECD countries; (2) To analyse the ways the conventional market has addressed the issue of longevity risk and the products offered; (3) To explore the possible solutions to the related problems faced by the Muslim world.

Session P7: Microfinance Time: 16.00-17.30 Location: LUMS Lecture Theatre 6 An Islamic Microfinance Business Model in Bangladesh and its Role in Poverty Alleviation. (ID 237) Hassan, Abul

Present socio-economic context and women wellbeing in Bangladesh imposes lots of constraints on women’s involvement in income generating activities. Different studies showed that the implementation of World Bank structural adjustment policies have had mixed impacts on women and their wellbeing. By involving poor people specially women in Islamic microfinance programmes in Bangladesh are used as a tool to combat poverty. Women are specifically targeted by Islamic microfinance under the rural development scheme of Islami Bank Bangladesh that provide interest free loan to the women groups. The programme has a multiplier effect since women invest largely in their households. The aim of this research is twofold: firstly, it wanted to confirm or refute a positive link between Islamic microfinance and the socio-economic wellbeing of women in Bangladesh and secondly, to explore the context in which Islamic microfinance programs function in Bangladesh and the way their performance can be improved.

Demand for Islamic Micro Financing among the Urban Micro Entrepreneurs in Malaysia. (ID 232) Hassan, Salwana; Abdul Rahman, Rashidah

Microfinance industry has captured global attention as an ideal model of economic development that reduce poverty by providing small financial assistance and services to the poor families. The growth of Islamic finance industry must also include the needs of Shariah compliant products for the micro entrepreneurs. Loans from commercial banks are not designed to help those without assets as collaterals, thus providing micro loans are considered as very risky and not cost effective. As a result, many microfinance programmes are nonprofit organisations that rely so much on donations and subsidies from other parties sources of funds to stay in existence and. The more they can reach their clients, the more impressive their performances would be.

Hence, the main objective of this study is to assess the demand for microcredit in an urban area in Malaysia; thus determine the potential market size. 600 questionnaires were distributed to urban micro entrepreneurs in Selangor. In summary, the findings inferred that the current demand for Islamic microcredit for the chosen sample is not that high, that is only 14% as they are scared of getting indebted and feel that repayments of the loan is burdensome.

An Investigation of Consumer Choices and Attitudes toward Islamic Micro-Credit Products in the Egyptian Market. (ID 208) Raghda El Ebrashi; Ahmed Ibrahem Mosa; Noha El Bassiouny; Rania Salem; Imane Helmy

Microfinance is a well-acknowledged international tool in poverty eradication and community development in developing countries. On another note, the principles of Islamic finance are under research spotlight globally, especially with the advent of the financial crisis and the following recession. The industry is witnessing an average growth rate of 15% p.a. In Egypt, there have been individual attempts offering Islamic micro credit as a tool for poverty alleviation. However, no research has investigated the degree of consumer acceptance towards Islamic micro financing. Islamic microcredit products/instruments vary between profit and losssharing (PLS), sale-based, lease-based, and loans with service charge modes of financing. Mudarabah and Musharakah instruments are examples of PLS modes of financing, while Murabahah and Ijarah represent sale-based financing and lease-based financing, respectively. The current paper focuses on analyzing the results using a series of Mixed Multinomial Logit models (MMNL) using the consumer choice of Islamic products survey from the two regions in Egypt (i.e. Cairo and Upper Egypt).

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Session P8: Islamic Indices I Time: 16.00-17.30 Location: LUMS Lecture Theatre 9 Long Run Asymmetric Relationships between Islamic and Conventional Equity Indices. (ID 244) Alexakis, Christos; Pappas, Vasileios; Tsikouras, Alexandros

Despite the substantial growth in the Islamic finance sector in the recent years, there has been limited empirical research on Islamic equity indices. In our paper we explore the interconnectedness between Islamic and conventional equity indices during the period spanning from 2006 to 2010. The Dow Jones Islamic Market is representative of the Islamic equity market, while the Dow Jones Global and Dow Jones Industrial Average are well perceived equity benchmark indices. We adopt hidden co-integration and granger causality analysis, while we examine the impact of market conditions. We find that the negative index components are significant between the Islamic equity index and the conventional benchmarks, yet the two conventional indices do not support this contention.

The Ethical Screening and Compliance Information Disclosure Practices of Islamic Equity Funds. (ID 142) Abdul Halim, Zairihan

This paper investigates the disclosure practices of ethical screening and compliance information of a special class of socially responsible investment (SRI) equity funds rooted in Islamic ethics – Islamic equity funds (IEFs). These funds screen investments on compliance with the morals and values of Islam, where conventional interest, gambling, excessive uncertainty, and non-ethical products are prohibited. The disclosures of those screenings and their compliance information are important for ethical investors especially for religious investors who are more loyal to their beliefs. This paper shows the disclosure practices of Islamic funds and examines their determinants. Disclosures on Shariah advisors and screening information are quite high but not on compliance information disclosure. The results show that younger funds domiciled in Muslim jurisdiction which follow common legal system have higher disclosure level. These findings are important for fund managers and regulators who wish to consider the effectiveness of their disclosure framework for investors who want to make informed decisions.

Do Stock Returns React to an Islamic Label? (ID 184) Hayat, Raphie; De Anca, Celia

We study the effects of changes to an Islamic index on US stock returns using the four factor Carhart model to calculate abnormal returns. We find that, unlike in previous research, neither addition to nor deletion from an Islamic index leads to abnormal returns. This holds for short term periods (announcement and actual inclusion date) as well as or over longer periods. Furthermore, we don’t find convincing evidence that addition to an Islamic index signals higher liquidity, profitability, investor awareness or lower risk. We conclude that an Islamic label for stocks does not convey any additional information to investors.

Session P9: Regulation Time: 16.00-17.30 Location: LUMS Lecture Theatre 10 What Drives Profitability of Banks: Do Interest Rate and “Fee and Commissions” Impact the Profitability of Banks? Evidence from European Countries. (ID 216) Ouatik el Alaoui, AbdelKader; Diwandaru, Ginanjar; Rosly, Saiful Al Azhar; Masih, Mansur; Hisham, Mohamed

We look into the theoretical rationale behind the role of the bank as financial intermediary by using the “fee and commissions” as a proxy, and the impact of non-interest income on the profit of the European banks and how it affects firms’ profitability, before we look at the impact of interest rate on profitability of the 34 banks in nine European countries. Our main finding suggests that the “Fee and commissions” are not really influencing the profitability of the universal banks. However, the “Net Non-interest income” and the interest rate are highly impacting the profitability of the universal banks.

Islamic Banks, Deposit Insurance Reform, and Market Discipline: Evidence from a Natural Framework.

(ID 222) Disli, Mustafa; Aysan, Ahmet Faruk; Duygun, Meryem; Ozturk, Huseyin

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Although it has been intensively claimed that Islamic banks are more subject to market discipline, the empirical literature is surprisingly mute on this topic. To fill this gap and to verify the conjecture that Islamic bank depositors are indeed able to monitor and discipline their banks, we use Turkey as a test setting. The theory of market discipline predicts that when excessive risk taking occurs, depositors will ask higher returns on their deposits or withdraw their funds. Further, we also look at the effect of the deposit insurance reform in which the dual deposit insurance was revised and all banks were put under the same deposit insurance company in December 2005. This gives us a natural experiment in which the effect of the reform can be compared for the treatment group (i.e., Islamic banks) and control group (i.e., conventional banks). We find that the deposit insurance reform enhanced market discipline in the Turkish Islamic banking sector. This reform may have upset the sensitivities of the religiously inspired depositors, and perhaps more importantly it might have terminated the existing mutual supervision and support among Islamic banks.

Governance and Regulation in Islamic Finance: On the Ground with Market Participants. (ID 144) Kok, Seng Kiong; Giorgioni, Gianluigi

The objective of this paper is to analyse the issues of governance and regulation in Islamic finance by means of an exploratory qualitative methodology, which entailed the use of semi-structured interviews with individuals who possessed deep, extensive practical knowledge in the subject matter and ideally a mix of professionals and academics. The interviews consisted of questions that enquired about several pertinent themes on governance and regulation in Islamic finance as highlighted from the literature review. These themes consisted of the perception of Islamic finance from the perspective of conventional finance, the view of transparency and uniformity, the examination of Shariah-supervisory boards, the role of lenders of last resort in Islamic finance and the further prospects and challenges of the Islamic financial system. Interview precepts were analysed for saturation and the findings indicate a general acceptance of market participants of these theoretical issues.

However the empirical analysis has also raised new questions about the direction of Islamic financial governance and regulation.

Tuesday, 24th June, 2014 Session M4: Islamic Equity Indices II Location: LUMS Lecture Theatre 3

Time: 09.30-11.00

Price and Volume Effects of the Dow Jones Islamic Market World Index Revisions. (ID 149) Mazouz, Khelifa; Mohmed, Abdulkadir; Saadouni, Brahim

We examine the short-term effects on the price and liquidity of the Down Jones Islamic Market World Index (DJIMWI) quarterly revisions (additions and deletions) for a very large sample (8,250) of companies from eighteen countries during the period from May 1999 to June 2012. The results show that the price effect depends on whether the additions (deletions) come from developed or emerging stock markets. Additions (deletions) from emerging stock markets tend to experience greater and significant positive (negative) price response than those from developed markets. The findings also reveal that the announcements of additions (deletions) have a greater impact on the volume and the bid-ask spread of the companies from emerging markets. Overall, the results can be viewed as supportive of investor recognition or ‘shadow cost’ hypothesis (Miller, 1987).

Testing the Conventional and Islamic Financial Market Contagion: Evidence from Wavelet Analysis.

(ID165) Saiti, Buerhan; Ismath Bacha, Obiyathulla; Masih, Mansur

This study is the first attempt at testing whether there has been any contagion among the Shari’ah-compliant stock indexes during the most recent international financial crisis: the US subprime crisis of 2007-2009 and the Lehman Brothers collapse in 2008, with the application of a time-frequency decomposition technique

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known as ‘wavelet approach’ both in discrete and continuous forms recently imported to finance from engineering sciences. We analyze the daily data covering the period from June 2005 to December 2011 for the 18 MSCI conventional and Islamic stock market indexes of the Islamic (Malaysia, Indonesia, Turkey, GCC ex-Saudi) and non-Islamic countries (Japan, China, Korea, Taiwan and Hong Kong). Our study is focused on investigating the following empirical question: are the co-movements of selective stock markets normal (interdependent) or excessive (contagious) during the first and the second wave of the financial crisis?

Incorporating Socially Responsible Investment Principles in Islamic Equity Investments. (ID 181) Malik, Rizwan; Nurullah, Mohamed; Dar, Humayon

In this paper we propose Islamic screening methodologies to incorporate wider ethical and Islamic social measures hence moving Islamic equity investments from just being Shari’a compliant to achieving social justice and values as promoted by the Maqasid al-Shari’a (objectives of Shari’a). We apply Dow Jones Shari’a screening methodology to Dow Jones Sustainability Index– World and MSCI Shari’a screening methodology to MSCI SRI – World index to construct new portfolios which consider socially responsible screening methodologies while being Shari’a compliant. Empirical analysis is carried out for a sample of stocks on both indices between January 2000 and December 2013.

Session P10: Financial Crisis Time: 09.30-11.00 Location: LUMS Lecture Theatre 6 Islamic Banking and Asset Price Bubbles. (ID 186) Azmat, Saad; Ghaffar, Hamza; Azad, Sohel

The paper examines how Islamic banks’ risk sharing contracts, compared to conventional banks’ risk shifting contracts, can help prevent the formation of asset price bubbles and a possible financial crisis. The paper develops a model showing that in the event of a macroeconomic shock, investors become risk averse, relinquish their direct investments in the real economy, and invest in the banking sector, which is perceived to be safer.

The banking sector, as a result, is flushed with excess liquidity. This actuates the agency problem between bank managers and shareholders, since managerial compensation is linked to the loan volume rather than the longer profitability of loan contracts. The excessive lending creates asset price bubbles. Given the risk sharing nature of Islamic banks’ liability side, the model shows that the investor’s payoff is much more volatile making them riskier than conventional banks. Therefore, if a macroeconomic shock occurs, Islamic banks’ liquidity influx compared to their conventional counterparts should be lower. This should prevent excessive lending and reduce the possibility of an asset price bubble.

Financial Deepening and Financial Crises in the Context of Islamic Finance. (ID 198) Shah, Zulfiqar Ali; Bhutta, Nousheen Tariq

The paper aims to investigate the impact of financial deepening on financial crises, in the presence of Islamic financing. Being the positive aspects of financial deepening, it provides favorable hiding cost, efficient price mechanism, enhancement of governmental policies and improves market competitions. However, if country exhibits financial deepening too excessively, it may lead to inefficiency of market liquidity and dampening of profit margin, which may be attributable to financial crises, particularly presenting the positive as well as negative scenarios of financial deepening. Additionally, financial deepening may be severely hit the developing economies as compared to developed ones. This paper provides a unique moderating edge to the above nexus i.e. if Islamic mode of financing has been used then the severity of financial crises can be eliminated to some extent and specifically, future crises may be prevented. In order to test this model, data has been collected from Islamic banks of Pakistan for the period of 5 years.

Risk Mutualization in Islamic Banking. (ID 202) Jean-Baptiste Desquilbet; Fedi Kalai; Maxence Miéra

This paper provides a theoretical framework to analyze risk-sharing efficiency in Islamic banking. We compare efficiency of Profit Sharing Investment Account contract in different situations. We show that risk mutualization among heterogeneous banks in mutual fund can improve risk-sharing efficiency. This mechanism improves economic welfare and constitutes a Shariah compliant substitute to banking reinsurance (Retakaful).

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Session P11: Accounting Quality and SSB Time: 09.30-11.00 Location: LUMS Lecture Theatre 9 Accounting Quality and Political Connections in Banks : Evidence from MENA Countries. (ID 227) Abdelsalam, Omneya; Dimitropoulos, Panagiotis; Leventis, Stergios

This study investigates the impact of political connections on the quality of financial reporting. We consider Islamic and Conventional banks within MENA countries over the period 2008-2012. After utilizing multiple measures of earnings management and conditional conservatism we find that Islamic and conventional banks follow similar patterns of financial reporting quality. However, we find that political connected conventional banks exercise more intense practices of earnings management while they are less conservative. Our findings are robust over several. We offer several diagnostics to test the sensitivity of our findings. We provide useful policy implications for investors and regulators.

Exploring and Critical Insights towards SSB Report for Islamic Banks and its Link with Financial Performance Level. (ID 173) Hussainey, Khaled; El-Halaby, Sherif

The research aims to investigate the level of disclosure for SSB report and for what extent it complies with the suggested disclosure index and for what extent it reflects the compliance with Islamic sharia. The paper also contributes to literature by exploring the degree to which the content of SSB report change from year to year and what are the main differences and similarities between sharia report and external auditor report. Finally, the paper explores the link between the level of disclosure for SSB report and the financial performance level.

The average compliance level for 150 Islamic banks related to sharia board disclosure is 45%. There are more than 35 Islamic banks do not disclose any information about sharia report. The sharia board report did not significantly change from year to another.

Reforming Accountability towards Internal Shariah Review Quality in Islamic Financial Institutions: A Proposed Framework. (ID 174) Kasim, Nawal; Mohamad, Mohd Nizam; Abdul Rahman, Rashidah

Recently issued Shariah Governance Framework for Islamic Financial Institutions is an initiative taken by the Central Bank of Malaysia in order to meet the demands required by new developments in Islamic finance as well as higher expectation of the stakeholders and confidence of public pertaining to the Shariah Compliance process. The aim of this paper is to examine the factors that may contribute towards the accountability of the quality of the Shariah review in Islamic financial institutions in Malaysia. Since this paper is part of a bigger project, it forms a foundation for the whole research that aims to examine the relationship and impact of the independent variables of regulator, Shariah Advisory Committee, management, and manpower towards the variable of the primary interest, the Shariah review quality.

Session P12: SME Financing Time: 09.30-11.00 Location: LUMS Lecture Theatre 10 The Nexus between Informal Credit and Informal Labor for Micro and Small Enterprises in Egypt. (ID 251) Said, Mona; El Komi, Mohamed

The paper seeks to answer the following the questions: 1) What is the effect of informal credit on the performance, risk and return to capital of MSEs? 2) What are the channels through which informal credit shape the employment profile and the use of informal labor at MSEs? 3) Does informal credit provide a disincentive for the formalization of MSEs? 4) Are there significant differences between RoSCA (Rotating Savings and Credit Associations) and the other sources of informal credit in terms of their effect on the formalization of MSEs? Our results are likely to shed light for the first time on one rather promising form of informal financing for household enterprises in Egypt: ROSCAs, which account for a significant proportion of sources of finance for both small and larger enterprises that exceeds both bank loans and household savings. The paper findings would call for exploring the potential for ‘formalizing’ or extension of these schemes in bank or credit-union guaranteed sets ups, to generate higher take-up and repayment rates, and hence bolster the contribution of

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MSE’s to employment creation, formalisation and poverty alleviation.

Role of Waqf In Financing SMEs: A Perspective from Kuwait. (ID 246) Jones, Dr. Tracy; Hussainey, Khaled; Alhabashi, Khaled; Sefiani, Yassine

The aim of this study is to analyze and evaluate the role of ‘waqf ’ (Endowment) as an Islamic finance method to support SMEs in Kuwait. The study found that the majority of participants from the three different groups perceived waqf as a good and permissible new financial Islamic method to support SMEs. However, the risk associated with this method of finance and the marketing effort to convince the donors were among the key barriers for such method of finance. The study is among those few studies that adds to our understanding of the role of waqf and contributes to the theory about SME development using Islamic finance methods in the context of Kuwait.

The Role of Islamic Banks in Financing Algerian Small &Medium Sized Enterprises in Algeria “Empirical Study”. (ID 220) Mohammed, Kerbouche; Abdennour, Belmimoun; Fatima, Bouhelal

Small and medium-sized enterprises (SMEs) are considered to be an engine for growth in both developed and developing countries; the benefits of a vibrant SME sector include: the creation of employment opportunities; the strengthening of industrial linkages; the promotion of flexibility and innovation; and the generation of export revenues (Mensah, 1996; Harvie and Lee, 2001; Lerner, 2002). Under the aggravation problem of unemployment and the inability of public enterprises and government’s institutions to respond to requests for employment, it was incumbent of Algerian State to search for solutions and alternatives to ease the burden of providing the job, so the optimal solution to decrease this phenomenon was to encourage the entrepreneurship and small and medium enterprise.

Session M5: Behavioural Finance / Signaling Time: 11.30-13.00 Location: LUMS Lecture Theatre 3 The Puzzle of Uniform Standards and Market Segmentation among Islamic Banks. (ID 203) Berg, Nathan; El-Komi, Mohamed; Kim, Jeong-Yoo

This paper proposes a new answer to a controversial puzzle in Islamic finance described by El-Gamal (2002): “Despite the long development of uniform standards for Islamic finance, the market remains largely segmented.” We explain market segmentation as a separating equilibrium in which Islamic Bank (IB) premiums serve as a socially beneficial (although costly) signaling mechanism. Market segmentation under a uniform Shariah standard occurs when the Shariah boards of two IBs use substantially different degrees of stringency, which lead to substantially different premiums over conventional financing, even though they agree on a common set of requirements as determined by Islamic jurisprudence to minimally comply with Shariah law. By allowing for multiple Muslim communities that have distinct group identities and consequently distinct goals when signaling group membership, the model provides an explanation for market segmentation with multiple IBs that choose to offer distinct ranges of products and serve different markets while not disagreeing about which financial products are impermissible under Shariah law.

Investor’s Choice of Shariah Compliant ‘Replicas’ and Original Islamic Instruments. (ID 157) Azmat, Saad; Jalil, Naiman; Skully, Michael; Brown, Kym

This paper offers a behavioral perspective on why Islamic capital markets are dominated by those financial instruments that almost replicate conventional financial products (i.e. Islamic debt bonds and Islamic equities). In contrast, original Islamic instruments involving risk and return sharing (Musharakah) have failed to emerge. This paper argues that in the absence of these Islamic replicas, the investor’s choice was simply between Islamic and non-Islamic instruments. Along with risk and return, Shariah consciousness also played an integral part in investor utility. As Shariah standards gave legitimacy to different financial structures, the investors could choose between different Shariah compliant options including both Islamic replicas and original Islamic instruments. We argue that, that once the investor’s intrinsic need for Shariah compliance is fulfilled, an instrument’s risk-return features would become more important. So for loss averse investors with shorter evaluation periods, the loss sharing feature of risk and return instruments (Musharkah) makes them less attractive than Islamic debt bonds.

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Session P13: Sukuk Time: 11.30-13.00 Location: LUMS Lecture Theatre 6 Asset Generated Sukuk Managed by Independent Asset Manager: A Case Study for a Sukuk Mudaraba (Asset Finance) Applied to a French SME. (ID 194) Patel, Anass

Asset-managed sukuk is a pure innovation that we prototyped in the French market where SMEs financing is a national priority due to the bad economic conditions. This paper aims at presenting the result of the research and structuring exercise over a real case study for a mudaraba sukuk which is being proposed to the market, hoping to open the doors to more project finance type sukuk issuance, especially for (small) Euro denominated ticket. We discuss how the main issues arisen to SMEs financing such as opacity of information, lack of historic track-record, adverse selection in the theoretical framework of asymmetry of information can be resolved using a incentivized scheme of profit sharing ratio and a strong security package in the hands of investors enforced by the third party asset manager.

Does a Held-to-Maturity Strategy Impede Effective Portfolio Diversification for Islamic Bond (Sukuk) Portfolios? A Multi-scale Continuous Wavelet Correlation Analysis. (ID 152) Najeeb, Syed Faiq; Bacha, Obiyathulla Ismath; Masih, Abul Mansur

This paper (using recently available data and continuous wavelet transform methodologies) has made an initial attempt to study the portfolio diversification strategies for Islamic bond (sukuk) portfolios across heterogeneous investment horizons using the Malaysian and the Gulf Cooperation Council (GCC) sukuk markets as a case study. Our findings critically indicate that returns between local currency sukuk in different markets have low levels of long-term correlations, thus enabling portfolio diversification benefits. However, international currency sukuk issued in different markets exhibit high levels of long-term correlations which impede portfolio diversification benefits for held-to-maturity investments. A similar impediment is also witnessed in the domestic market context where diversification is intended by investing in different types of domestic sukuk. Overall, our findings critically highlight the feasibility of held-to-maturity sukuk investment strategies from a portfolio diversification perspective.

Capital Market Imperfections and Corporate Sukuk Issuance. (ID 146) Abdul Halim, Zairihan; How, Janice; Nainggolan, Yunieta; Verhoeven, Peter

In this paper, we examine the factors driving firms’ decision to issue sukuk and its structure. Results show that firms with higher pre-tax income, lower credit strength, and greater growth opportunities are more likely to issue sukuk than conventional bonds, consistent with the tax incentive and reputation arguments. Despite the wide range of Shariah-compliant financing structures that have been introduced under sukuk, we find the market shows a preference for the debt-like and secured structure. Our analysis of corporate choice of sukuk structure reveals that information asymmetry and agency costs play an important role. This paper contributes to the ongoing debate on the departure of IBF practice from its ideals, and in a broader sense the literature on corporate debt choice.

Session P14: Performance of banks Time: 11.30-13.00 Location: LUMS Lecture Theatre 9 Global Evidence on Financial Stability during the Credit Crunch: Did it Matter for Islamic Banks? (ID 229) Abdelsalam, Omneya; Elnahass, Marwa Sami

Using uniquely constructed and hand collected database for bank asset securitizations (2,517 bank-year observations) including 25 countries during the years 2007 to 2012, this paper tests if, in practice, Islamic banks (IBs) do securitise assets using different asset structures. We do so with the purpose of examining the financial stability for both IBs and conventional banks (CBs). IBs have a constrained securitisation model in line with Islamic finance principles. This constrained model provides additional protection than the conventional model. We hypothesize that IBs that do securitize assets, in practice, have better asset quality/lower credit risk,

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better liquidity higher profitability and are more solvent than CBs. Financial Performance Analysis of Islamic Banks with Multilevel Interior Growing Self-Organizing Maps.

(ID 250) Kessentini, Mouna; Ayadi, Thouraya; Jeffers, Esther; Alimi, Adel

In recent years, Islamic banks have achieved remarkable growth in several countries. Bank managers seeking to improve their bank’s ranking in the world must know who their direct or indirect competitors are and how they are performing. This paper highlights the usefulness of a new dynamic variant of Self-Organizing Maps, namely, Multilevel Interior Growing Self-Organizing Maps (MIGSOM) to compare and analyze intertemporal and inter-bank performance of Islamic banks. MIGSOM is a means of clustering Islamic banks into homogeneous groups while displaying similarities and differences among all banks into a three-dimensional space. The selected database contains 54 commercial Islamic banks operating in eighteen countries from 2009 to 2011. We consider nine ratios measuring different aspects of financial performance. We find that this unsupervised neural network is effective for assessing bank efficiency and performance with minimum cost.

Financial Intermediation Costs in Islamic Banks: The Role of Bank-specific, Market-specific and Institutional-Governance Factors. (ID 180) Abdul Kader Malim, Nurhafiza; Ibrahim, Mansor; Mohd Rasid, Mohamed Eskandar Shah

Given the significant role financial intermediation plays in an economy, understanding the behavior of bank intermediation costs is vital for growth and stability in Islamic banking system. Thus, motivated by the remarkable development in Islamic banking and limited research on the subject, it is imperative to examine the determinants of financial intermediation costs in Islamic banks that will further promote Islamic banking development. The objective of this study is to examine the impact of bank-specific factors, market structure and institutional governance factors on intermediation costs in Islamic banks. This paper attempts to extend the bank margin literature by providing empirical evidence using panel GMM covering the Islamic banking sector in OIC countries over 2005-2011 period. In view of the findings, this study would provide some useful insights for reducing the intermediation costs in Islamic banks. In addition, the results would highlight the policy measures which are aimed to increase the efficiency in the Islamic banking system in order to provide not only an alternative but an efficient form of intermediation.

Session P15: Islamic Premium Time: 11.30-13.00 Location: LUMS Lecture Theatre 10 IIBR-LIBOR Relationship and the Nature and Determinants of “Islamic Premium”. (ID 185) Azad, ASM Sohel; Ahsan, Amirul; Azmat, Saad; Fang, Victor

This paper examines the relationship between Islamic interbank offer rate (IIBR) and LIBOR to see whether the Islamic financial industry has reached a level of maturity where its rate is delinked from conventional interest rate benchmarks. Specifically, the paper focuses on whether there exists an ‘Islamic premium’ between the two benchmarks and then analyse the determinants of that premium. To investigate the relationship between the two benchmark rates, the study uses daily IIBR-LIBOR rates since the middle of November, 2011 to the end of January 2014 and find neither long-term equilibrium relationship nor short-term dynamic relationship. This implies two aspects. First, the IIBR is independently determined reflecting its unique characteristics and market conditions as opposed to those banks in London. Second, the observed negative or no relationship is not an opportunity for arbitrage but rather it reflects the intrinsic Islamic banking industry risk.

Islamic Calendar Anomalies: Evidence from Pakistani Firm-Level Data. (ID 134) Halari, Anwar; Tantisantiwong, Nongnuch; Power, David; Helliar, Christine

Most prior research has tested for monthly regularities based on the Gregorian calendar; by contrast, little attention has been paid to other calendars based on different religions or cultures. This paper examines Islamic monthly anomalies in a stock market located within a Muslim country - Pakistan. The study employs data for 106 companies listed on the Karachi Stock Exchange (KSE) over the period from 1995 to 2011 using an asymmetric generalized autoregressive conditional heteroscedasticity model to examine whether the mean and volatility of share returns in the KSE vary with Islamic months. The results from the model offer very

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little evidence of a monthly seasonal anomaly in average returns, but significant evidence is documented of monthly patterns in the volatility of returns; exceptionally low volatility is reported for the month of Jamatul Awwal. This is in contraction to earlier findings which suggested that the month of Ramadan was associated with the lowest volatility.

Herding and the Ramadan Effect. (ID 128)

Gavriilidis, Konstantinos; Kallinterakis, Vasileios; Tsalavoutas, Ioannis

The Ramadan month entails common religious experiences for Muslims. Empirical research reports a series of psychological effects (e.g., positive mood) associated with its celebration that extend to investment decisions (Białkowski et al, 2012). We examine whether the similarity of emotions during Ramadan is translated into similarity in trades (the latter is commonly known as herding) using data from seven, predominantly, Muslim countries (Bangladesh, Egypt, Indonesia, Malaysia, Morocco, Pakistan and Turkey). The long-standing presence of these countries’ equity markets allows for data on all of them to be available since early-to-mid 1990s. Using the established framework by Chang et al. (2000), we test for the presence of herding during the Ramadan month versus the months outside Ramadan. Results indicate that herding is significant during Ramadan in the majority of the markets examined, with the exceptions of Malaysia and Pakistan, where herding is significant only during non-Ramadan months. For the markets where herding is significant during the Ramadan, herding is either of lower magnitude or insignificant during non-Ramadan months. These results are robust when controlling for the effect of positive (negative) domestic market returns, rising (falling) domestic volume, positive (negative) US market returns and the period prior to versus following the outbreak of the 2008 global financial crisis. Overall, this study extends recent evidence which links investor mood and financial market behaviour (e.g., Shu, 2010) with a particular focus on the issues underlying the paradigm of Islamic finance in the 21st century.

Session M6: Efficiency of Banks Time: 14.00-15.30 Location: LUMS Lecture Theatre 3 Asset-Liability Management in Islamic Banks: Evidence from Emerging Markets Using Canonical Correlation Analysis. (ID 150) Abou-El-Sood, Heba; El-Ansary, Osama

This paper analyzes the interdependencies between the assets and liabilities portfolio choice of Islamic banks in emerging markets. We collect data reported in the financial statements of 41 Islamic banks in the Middle East and North Africa (MENA) region during the period 2002–2012 that constitute 297 bank-year observations. Using Canonical Correlation Analysis (CCA), we investigate the degree of interdependencies between the asset and liability accounts, which include financial instruments that are unique to Islamic banks. Furthermore, we identify the underlying relations between and among the individual elements in the two portfolios in the boom period leading up to the financial crisis and those during the financial crisis. Finally, we examine asset-liability management in small and large Islamic banks. The results are relevant to the understanding of asset-liability management decisions and to the regulation of Islamic banks during periods of economic boom and bust.

Examining the Relationship between Default Risk and Efficiency in Islamic and Conventional Banks. (ID 255) Momna Saeed; Marwan Izzeldin

We examine the relationship between efficiency and default risk in Islamic banks (IBs) and conventional banks (CBs) in Gulf Cooperation Countries (GCC) and three non-GCC countries over the period 2002– 2010. To the best of our knowledge this is the first study to consider the efficiency–default risk paradigm in a comparative setup which includes IBs. Efficiency and default risk are measured using the Stochastic Frontier Approach and distance to default (Merton’s model) respectively. The existence of causality/reverse causality between the two is addressed via a panel Vector Auto Regression (VAR) framework. Our analysis shows that the relationship between profit efficiency and default risk banks across the sample, for CBs and for the GCC is such that a decrease in default risk is associated with lower efficiency levels. With the single exception of IBs, the causality from profit efficiency to default risk is inversely related for all categories. For CBs, the trade-off between efficiency and risk is evident. The absence of a trade-off for IBs suggests that efficiency and default

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risk are plausible early warning indicators of IB instability. These findings could be of relevance to regulators in countries where both banking system co-exist.

Convergence in Banking Efficiency: A Comparison of Islamic and Conventional Banks Using a Random Parameter Estimation Model. (ID 231) Johnes, Jill; Izzeldin, Marwan; Pappas, Vasileios; Tsionas, Mike

In a recent paper (Johnes et al. 2013) we examined and compared the efficiency of Islamic and conventional banks using data envelopment analysis and meta-frontier analysis. One finding of this work was that the modus operandi of Islamic banks has become more of an impediment to efficiency following the global financial crisis. In order to gain a better understanding of this result, in this paper we examine patterns of efficiency over time, and, in particular, whether there are differences between Islamic and conventional banks in rates of efficiency convergence. Our estimations are based on an unbalanced panel of Islamic and conventional banks from 23 countries operating over the period 2000 to 2012. Our study differs from the typical banking efficiency convergence literature which generally examines whether countries in an economic union (eg the European Union) enjoy benefits of market integration such as convergence in banking efficiency. Here we are interested in Islamic banks; while they have in common the need to operate in a Shariah-compliant manner, this might be the only common factor since they are geographically scattered across diverse countries.

We therefore adapt the usual approach to the analysis of banking efficiency convergence. In a first stage we develop and estimate, using stochastic frontier analysis, a multi-output multi-input output distance function using stochastic frontier analysis. We are able to derive estimates of gross efficiency (the efficiency which encompasses managerial behaviour and the effects of modus operandi), and net efficiency which isolates managerial efficiency. Previous studies have typically derived efficiency estimates using a stochastic cost function (Weill 2009; Casu and Giradone 2010), but we believe the assumption of cost minimization underlying a cost frontier approach to be inappropriate in a context where Islamic and conventional banks are being compared.

Session P16: Conceptual II Time: 14.00-15.30 Location: LUMS Lecture Theatre 6 Social Responsibility in Qur’an: Toward a Moral Individual Responsibility Framework. (ID 224) Helfaya, Akrum Nasr Ekara; Kotb, Amr; Abdelzaher, Dina

A growing body of literature has made the link between corporate social responsibility (CSR) and religious beliefs, yet the “how” component of that link and the implications of it are currently underdeveloped. Social responsibility is often dependent on a key individual leader: executive, manager, worker, customer, supplier, and investor. Given the dire need to address the unmet social needs in the region, we focus on the context of Muslims majority markets, whereby religious beliefs are instrumental in guiding individual actions. A very closer look at the divine messages, particularly the holy book of Muslims (i.e. the Qur’an), shows a moral accountability to promote social responsibility. We call for a move towards ISR concept, by drawing from the Islamic perspective of moral individual responsibility (MIR) towards greater society. This approach depicts a social responsibility that is motivated by both earthly and heavenly rewards.

The Incorporation of Hisbah as a Legal Channel Profits in Islamic Financial Transaction. (ID 175) Al Shugaa, Ameen Ali

This paper attempts to analyze the theoretical role and practical application of hibah (gift), enunciating its legality and detailing its allowance in contemporary Islamic finance. Several case studies evaluated the application of hibah (gift) in resolving issues related to riba (interest). In particular, these studies analyzed the validity of hibah as a way to generate revenue and eliminate riba (interest) from Islamic financial transactions.

In essence, hibah is a token of gratitude given voluntarily by a debtor to a creditor in return for a loan; the structuring of Islamic bonds based on assets; Inter-bank Mudharabahi investment contracts; or in cases of delayed payments. One notable application of hibah is the ‘gift’ Islamic banks and Takaful (Solidarity) companies voluntarily pay their patrons on savings account balances, which represents a proportion of the profit made by using those saving account balances in various investments and activities.

A Holistic Framework for Islamic Accountant Model and Its Value to Investors. (ID 164)

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El-Halaby, Sherif; Hussainey, Khaled

Our paper aims to discuss relevant theories on the impact of disclosure on investors. It then examines the current disclosure practice by Islamic banks. The gap between theory and practice will be explored. We then suggest a framework for bridging the information gap between accountants and investors. We use both disclosure theories and Islamic accountability theories to explore the ideal model for disclosure and transparency. We then use three independent pilot studies to examine the current practice. This helped us to identify the gaps between the theory and practice.

Session P17: Behavioural Finance II Time: 14.00-15.30 Location: LUMS Lecture Theatre 9 Islamic Banking Premium: Signalling, Piety or Both? (ID 204) Avdukic, Alija; Berg, Nathan; El-Komi, Mohamed

This paper investigates the motives of IB customers behind choosing an IB product. Berg and Kim (2014) explain this by piety signalling, by which IBs use the higher premium as a screening device for distinguishing ‘Islamicity’ or ‘piety’ of customers. Others believe it is the framing effect of having “Islamic” names for financial products that are, otherwise, quite similar to the conventional ones (Gamal, 2007). The paper, therefore, tries to understand and disentangle these confounding motives through mixed techniques that are based on surveying actual IB customers and laboratory experiments. By using these techniques, we try to capture the customers’ actual understanding of Islamic financial products and Shari’ah compliancy, in order to determine their knowledge of Islamic finance. Hence we can define to what extent ‘Islamicity’ has an impact on accepting the products regardless of their cost and substance. We also try to measure the impact of signalling piety on their choice of IB products and how is this affected by changing the degree of piety in the sample.

How In-Group Trust Affects Financial Relations for Muslims. (ID 211) Banuri, Sheheryar; El-Komi, Mohamed

Trust is a key factor in financial relationships, particularly in societies with weak institutions. Without institutional protections, individuals often rely on their social networks to facilitate exchange. One consequence of this is the marginalization of minority groups. Using the composition of Islamic groups in Pakistan, we study how the choice of partners in a trust relationship varies by minority status. Specifically, we conduct a variant of the trust game (Berg, Dickhaut and McCabe, 1995) where subjects can choose their partners based on group identity. They can choose an in-group member (defined as an individual from their major and cohort at their university) or a stranger (defined as an individual from the same university, but not from their major and cohort). In-group members are less productive by design. We find that religious majority group members (Sunni Muslims) are less likely to select in-group members as partners, and are more trusting overall, but no more trustworthy than minority groups. Implications for Islamic contracts are discussed.

Is the Capital Structure of Islamic Banks Different? A Comparative Study with Conventional Banks in MENA Countries. (ID 217) El-Masry, Ahmed; Albarrak, Mansour S

Regulatory capital requirements have been considered as the focal element influencing capital structure of banks. Recent empirical evidence by Gropp and Heider (2010) (in the US and Europe) and Octavia and Brown (2010) (in developing countries around the world) challenge this assumption and prove that classical determinants of capital structure are the main factor in banks. The aim of this study is to investigate the determinants of capital structure in Islamic and conventional banks in the MENA area. This is one of the first attempts to empirically examine the determinants of capital structure in Islamic and conventional banks in general and in MENA countries in particular. This study fills in the gap in this important area of research and is considered to be the basis for future research in capital structure in Islamic banks. This study uses all available Islamic and conventional banks in the MENA region as it accounts for the majority of Islamic banks in the world. We test the determinants of capital structure using different models to shed light on different angles. These models are Panel data models (OLS, Fixed, and Random); Tobit and Dynamical model (Arellano-Bover Blundell-Bond), Structural Equation Modelling (SEM) and Generalized Regression Neural Networks (GRNN). The results indicate that Islamic banks have a different capital structure than conventional banks. We also test the relationship between ownership structure, credit ratings and capital structure. Our results have important implica-

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tions for investors and policy makers.

Session P18: Financial Risk & Stability II Time: 14.30-15.30 Location: LUMS Lecture Theatre 10 To Debt or Not to Debt: Are Islamic Banks Less Risky than Conventional Banks? (ID 234) Sorwar, Ghulam; Vasileios, Pappas; Pereira, John; Nurullah, Mohamed

Islamic banks differ from conventional banks in that they avoid conventional debt. It can be argued therefore that Islamic banks are more risk averse than conventional banks and as such during times of turbulence such as the recent financial crisis, Islamic banks should be less risky than conventional banks. We put this argument to the test during the recent financial crisis by comparing the riskiness of Islamic banks versus conventional banks before and during the financial crisis. We consider three separate risk measures, Value at Risk (VaR), Expected Shortfall (ES) and the Distance to Default (DD). Our sample consists of 70 Islamic banks for which publicly traded share prices are available and the world’s 200 largest conventional banks by market capitalisation. We then proceed to explain the perceived differences in terms of the capital structure of Islamic banks and conventional banks.

Relationship between Capital, Profitability, and Risk in Islamic Bank. (ID 223) Fatnassi, Ibrahim; Souid, Khawla; Hasnaoui, Habib; Ben Maatoug, Abderrazek

Our objective is to complement the empirical literature by providing new insights into the relationship between capital, risk, and profitability for Islamic Banks, through testing SCP, moral hazard, and regulatory hypotheses. We investigate the impact of country- and banking-specific characteristics on the linkage among capital, profitability, and risk. For this purpose, we use the two-step dynamic panel data approach developed

by Arellano and Bover (1995) and Bundell and Bond (2000). Significant positive relationship exists between risk and capital. Results implies that a 1% increase in capital decreases risk by about 8.9%. These results show that highly capitalized banks, Islamic banks experience more risk.

The Unique Risk Exposures of Islamic Banks’ Capital Buffers: A Dynamic Panel Data Analysis. (ID 154) Daher, Hassan Youssef; Masih, Mansur M.; Ibrahim, Mansor H.

We examine this issue over the period 2005-2012 in the 18 countries where Islamic and conventional commercial banks coexist. We employ a panel model using dynamic Generalized Methods of Moments (GMM) on a data set comprising 128 commercial banks of which 44 are Islamic commercial banks. In regions where participatory forms of financing are more prevalent, our findings also indicate a positive relationship between Islamic banks’ capital buffers and exposures to equity investment risk. A positive relationship within this context implies complexities resulting from monitoring these arrangements might lead to rising adverse selection and moral hazard problems. Our results expose shortcomings in capital adequacy guidelines and raise distinct policy implications with regards to the regulation and supervision of Islamic banks in jurisdictions where both bank types co-exist.

Session M7: Stock Markets Location: LUMS Lecture Theatre 3

Time: 16.00-17.30

The Role of Islamic Asset Classes in the Diversified Portfolios: Mean Variance Spanning Test. (ID 215) Ginanjar Dewandaru; Rumi Masih; Obiyathulla Ismath Bacha; A. Mansur M. Masih

Our study measures co-movements in Islamic and conventional equity markets, to discover contagion and to measure integration level. We apply wavelet decomposition to unveil the multi-horizon nature of co-movement. We find that the subprime crisis generates fundamental-based contagion for both markets. The less exposure for some Islamic indices can be due to low leverage effect and the exclusion of conventional financial stocks. We also find higher fundamental integration for Islamic markets, attributable to their allocation related to the real sector. Finally, we show a leading role of the LIBOR negatively over Islamic indices in the long run.

Leverage versus volatility: Evidence from the Capital Structure of European Firms. (ID 195)

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Ouatik el Alaoui, AbdelKader; Obiyathulla, Ismath Bacha; Masih, Mansur; Asutay, Mehmet

This study is the first attempt to investigate the role of the leverage in affecting the returns and the firm’s share price volatility in relation to Islamic finance perspective (IFP). The paper is based on a sample of 1000 European companies distributed into different portfolios with high and low debt, high and low assets and focused on ten different countries. The preliminary results tend to indicate that there are significant correlations between capital structure and both returns and volatility, but not necessarily with high debt to assets given different sizes and growth of firms. The paper suggests that three main factors need to be considered by the firms in order to improve their stability in the market: firstly, the level of capital structure but not the debt to total assets as it is suggested by some scholars using the IFP, secondly, the capitalization or the firm size, and finally, the level of the sovereign debt and country dynamics. Although, the latter may be beyond the firm’s control, it is up to the firm to consider its own market with implications on its leverage policy in relation to the frequency dependent strategy.

The Role of Islamic Asset Classes in the Diversified. (ID 215)

Dewandaru, Ginanjar; Masih, Rumi; Masih, Mansur; Ismath Bacha, Obiyathulla

Our study measures co-movements in Islamic and conventional equity markets, to discover contagion and to measure integration level. We apply wavelet decomposition to unveil the multi-horizon nature of co-movement. We find that the subprime crisis generates fundamental-based contagion for both markets. The less exposure for some Islamic indices can be due to low leverage effect and the exclusion of conventional financial stocks. We also find higher fundamental integration for Islamic markets, attributable to their allocation related to the real sector. Finally, we show a leading role of the LIBOR negatively over Islamic indices in the long run.

Session P19: Islamic Equity Indices III Time: 16.00-17.30 Location: LUMS Lecture Theatre 6 Evaluating Performance of Value-at-Risk Models for MENA Islamic Equity Market. (ID 249) Ben Ayed, Wassim; Ben Maatoug, Abderrazak; Fatnassi, Ibrahim

The purpose of this paper is to compare the relative predictive performance of various VaR models for a sample of MENA countries. Unlike the previous studies, we employ Islamic stock indices.

In order to evaluate the statistical accuracy of VAR models, we conduct two Backtesting methods for traders with long and short position. The sample extends from August 10, 2006 to February 14, 2014 for a total 1,962 observations. The sample period was determined primarily by the availability of data in the markets. The dataset was obtained from Morgan Stanley Capital International (MSCI) database.

How do Macroeconomic Changes Impact Islamic and Conventional Equity Prices? Evidence from Developed and Emerging Countries. (ID 159) Dewandaru, Ginanjar; Rizvi, Syed Aun R.; Sarkar, Kabir; Bacha, Obiyathulla I.; Masih, Mansur

This study explores the impact of macroeconomic changes on Islamic and conventional indices for a large set of 37 countries, classifying them according to developed and emerging countries. The study finds a higher impact of Industrial production on the Islamic equities, while the interest rate and money supply has a less impact as compared to the impact on conventional counterparts. This lends support to the argument that Shariah screening methodology provides a set of Islamic equities which is more founded in the real sector of the economy. In addition the adjustment process during the crisis is faster for Islamic equities in both regions.

These results provide initial empirical proof for further research into the specific economic variables impact on changes in Islamic equity prices.

Multi-scale Lead-Lag Relationship between the Stock and Futures Markets: Malaysia as a Case Study (ID 163) Jusoh, Hashim Bin; Ismath Bacha, Obiyathulla; Mohammed Masih, Abdul Mansur

There are many documented literatures of a lead-lag relationship between the stock index (spot) and stock index futures markets in developed countries compared to emerging countries. The study of this relationship in an emerging market based on different investment horizon is crucial for academic and trading purposes.

In this study, we analyze the relationship between stock index and stock index futures in Malaysia. We use a new approach to study the lead-lag relationship between series of stock index and stock index futures returns

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based on Continuous Wavelet Transform (CWT) and Discrete Wavelet Transform (DWT). The results show variability of the lead-lag relationship across frequency ranges and time scales, as also occasional in-phase behaviour between both markets. The relationships between stock index and stock index futures returns are evolving with time and they have non-homogeneous trends across different time scales. Some strong correlations have been found in regard to both markets inducing some lead-lag interactions between the markets.

The result from this study would provide a better picture of current derivatives market in emerging countries as in case of Malaysia and thus hopefully will shed some light in further development of Islamic equity futures for Islamic capital market industry especially in emerging market like Malaysia.

Session P20: Islamic Funds II Time: 16.00-17.30 Location: LUMS Lecture Theatre 9 Active Management and Mutual Fund Performance: A Comparison of Islamic and Socially Responsible Funds. (ID 138) Abdelsalam, Omneya; Duygun, Meryem; Matallín-Sáez, Juan Carlos; Tortosa-Ausina, Emili

The aims of our study are to analyze the relationship between active management and performance, with a particular focus on the case of Islamic and Socially Responsible Funds (SRI). In the more general context, Sharpe (1991, 1992) has shown the relevant role of residual risk in active management. Comparison between these two restricted types of funds is justified by differences in their screening criteria. Islamic mutual funds have very particular screening features such as, for instance, investing in Shari’ah-compliant assets. Islamic funds extend financial filters on the selected equity, which would result in a further-restricted universe—according to the percentage of interest paid or received and leverage. However, in other relevant traits, they bear some of the same attributes as SRI funds. The similarity is based on investing in a restricted universe of assets after applying their screening criteria. Consequently, according to Askari et al. (2010), in the case of restricted funds, when compared with their conventional counterparts, their constituents are likely to experience greater stability. This leads to an expectation that there may be a payoff in terms of higher persistence for these types of funds.

Role of ‘Qard Hassan’ in Financing Smes: A Perspective from Kuwait (ID 245) Jones, Tracy; Hussainey, Khaled; Alhabashi, Khaled; Sefiani, Yassine

This study aims to develop a clearer understanding of the role of the benevolent loan ‘qard ‘hassan in financing SMEs in Kuwait. The study adopts a qualitative approach in which twenty face-to-face semi-structured interviews were conducted with three different groups: SME owner-managers, managers from the financial institutions, and the Sharia board, forming a snowball selection, to explore their opinions and perceptions regarding ‘qard Hassan’. The study found that the majority of participants from the three different groups perceived qard hassan as a good financial Islamic method to support SMEs. It was shown that this method enables ownermanagers of SMEs to use qard hassan without bearing any extra costs. However, the risk associated with this method of finance was highly emphasised due to its misinterpretation by the borrowers. The findings of this study add to the understanding of the role of qard hassan in supporting SMEs in Kuwait. This could encourage the government to adopt related policies order to improve access to finance for SMEs The study adds to our understanding of the role of qard hassan and contributes to the theory about SME development using Islamic finance methods.

Ethical Screening and Financial Performance: The Case of Islamic Equity Funds. (ID 141) Nainggolan, Yunieta Anny; How, Janice; Verhoeven, Peter

The question of whether the performance of ethical investment, due to its limited investment universe, is different from conventional investment is still not settled in the literature. We aim to shed light on this question by providing new evidence on the financial performance of Islamic equity funds (IEFs). IEFs screen their investments and activities for adherence to Islamic law. Based on a sample of 387 Islamic funds from around the world from January 1984 to March 2010, we find IEFs underperform conventional funds by an average of 40 basis points per month, suggesting that investors pay a rather hefty cost for their beliefs. However, during the sub-prime crisis, IEFs outperformed matched conventional funds by 60 basis points per month on average. Next, we examine the association between ethical screening intensity and fund performance and find evidence a trade-off exists between our holdings-based measure of screening intensity and performance.

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Session P21: Miscellaneous Topics Time: 16.00-17.30 Location: LUMS Lecture Theatre 10 The Impact of Crude Oil Price on Islamic Stock Indices of South East Asian (SEA) Countries: A Comparative Analysis. (ID168) Abdullah, Ahmad Monir; Saiti, Buerhan; Masih, Mansur

This paper is an attempt to add value to the existing literature by empirically testing for the ‘time-varying’ and ‘scale dependent’ volatilities of and correlations between the selected Islamic stock indices of South East Asian countries and selected commodities. In order to address the research objectives, we have applied the cointegration test and several recently introduced econometric techniques such as the Maximum Overlap Discrete Wavelet Transform (MODWT), Continuous Wavelet Transform (CWT) and Multivariate GARCH – Dynamic Conditional Correlation. The data used in this paper are the daily data of three commodities (crude oil, gold and corn) prices and Islamic stock indices from 1 June 2007 until 28 February 2014. Our findings tend to suggest that there is a theoretical relationship between the select Islamic stock indices and select commodities (as evidenced in the cointegration tests) and that the Islamic stock indices of Singapore, Philippines and Indonesia are leading the other Islamic stock indices and the commodities (as evidenced in the Vector Error-Correction models). Consistent with these results, our analysis based on the application of the recent wavelet technique MODWT tends to indicate that the Singapore Islamic index is leading the other Islamic indices and the commodities. From the point of view of portfolio diversification benefits based on the extent of dynamic correlations between variables, our results tend to suggest that an investor should be aware that the Philippine Islamic stock index is less correlated with the crude oil in the short run (as evidenced in the continuous wavelet transform analysis) and that an investor holding the crude oil can gain by including the Malaysian Islamic stock index in his/her portfolio (as evidenced in the Dynamic conditional correlations analysis). Our analysis helps us unveil the portfolio diversification opportunities for the investors with heterogeneous investment horizons or holding stocks over different periods.

Bank Profitability and the Business Cycle: Are Islamic Banks More Stable? (ID158) Husman, Jardine

The knowledge of the link between banking sector profitability and the business cycles is an important element of macro-prudential analysis. This study aim to compare bank stability, in particular profits stability, of Islamic banks versus conventional banks amid business cycle fluctuations. Using monthly bank level in Indonesia, the empirical works comprise two stages of analysis. The first is to grasp an overview of profits stability across the two banking groups by estimating static relationship between individual bank profits and the average profitability of the total banking industry. I find no evidence of different stability in general. The second is to seek further understanding on the dynamic response of individual bank to business cycle fluctuations by employing dynamic panel technique which allows estimation on short-run and long-run response simultaneously. The dynamic results show that Islamic banks’ profits are more stable than conventional banks in the short-run, and -in support on the first stage results- indicate no significant difference between the two groups in the long-run. The inclusions of bank-specific characteristics such as size, credit risks and capital do not alter the results. However, inclusion of loan-to-assets ratio, removes the remaining short-run differences.

As there is evidence that bank with higher value of this particular characteristic has more stable profitability which Islamic banks inherently possess, this implies that loan-to-assets ratio may well explain the perceived short-run difference between the two groups.

Corporate Governance and Bank Operating Performance in Islamic and Conventional Banks: Evidence from GCC. (ID139) Chazi, Abdelaziz; Khallaf, Ashraf

We use a cross-country sample to offer the first empirical assessment and outcomes of corporate governance of Islamic banks in comparison to conventional banks during times running up to the recent global financial crisis. Our focus is on the effectiveness of mechanisms such as Board of Directors’ independence, and size, ownership structure/concentration, and bank regulations, and their impact on the operating performance (namely, profitability, efficiency, asset quality, and risk ratios). These corporate governance mechanisms have been shown in the literature to affect performance, cost of capital and accounting disclosure. To the best of our knowledge this is the first study of corporate governance at Islamic banks in the

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GCC, and of their performance and risk taking around the time of the recent financial crisis. The unique nature of the region and of the Islamic financial institutions makes this study very significant to investors, corporate managers and policy makers alike. Our preliminary results show that, prior to the crisis, Islamic banks outperform non Islamic banks in the region in terms of return on assets. They also exhibit a higher efficiency (measured by operating income to assets), lower provision for loan losses to assets, higher equity to deposits and higher loans to deposits ratios, suggesting that Islamic banks characterized by a strong equity participation component in their operations, are willing to take more risk.

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Gulf One Lancaster Centre for Economic Research (GOLCER) was established in May 2008 through a philanthropic donation from Gulf One Investment Bank. Actual Operations started in 2009. GOLCER main activities focus is on Islamic Banking and more broadly in the field of macroeconomics, with a special emphasis placed on economic and financial developments in the Gulf Cooperation Countries (GCC) area. The Gulf region has strategic significance for the UK and the rest of the EU, but remains relatively an uncharted territory in relation to applied economic research.

This is the impetus for the establishment of GOLCER.

Research GOLCER reinforces its research pursuits via establishing partnerships and collaborations with academic institutions and other research centres that focus on socio-economic and financial developments in the GCC area and more broadly in the Middle East and North Africa (MENA) region, attempting to develop and encourage research synergies across institutions with similar interests. Furthermore, the research activity of the Centre is complemented by the provision of tailored training courses focused on research methods and statistical software applied to management, economics and finance.

The donation that the centre received as well as a matching UK-fund are used to fund PhD students fees and bursaries, research associate positions, research activities which include conference organisation and attendance as well as invited speakers and researchers and a monthly Islamic finance bulletin.

The centre has been featured in the media in the Kingdom of Bahrain and the Islamic finance bulletin, which we produce every month, has been requested by a prominent online data platform, Zawya, (http://www.zawya.com/). Zawya has more than 100 thousand subscribers and our bulletin would available to all those starting from January 2012.

Future Plans To maximize our wider impact and to generate networking opportunities, the Centre will continue to develop links with external bodies. To this

end, we are developing an umbrella group of external collaborators who are actively working on research topics of direct relevance to the Gulf region (including Islamic finance). It is expected that areas of cooperation will include: • Joint workshops, conferences and projects.

• Joint application for research funds both nationally and internationally.

• Wider collaboration on the GOLCER-initiated Islamic Finance Bulletin.

• Jointly developed single page summaries of research output to facilitate access by interested parties.

• The establishment of a joint resource page for Islamic finance, economics and accounting.

• Working collaboratively towards fixed special issues of three-to-four star rated journals covering topics of particular application to the Gulf area.

• Accredited short and long term courses on Islamic finance in collaboration with leading UK institutions.

About the Director & Founder Dr. Marwan Izzeldin is an Associate Professor at the Department of Economics at Lancaster University where he is also the Director of Gulf One Lancaster Centre for Economic Research. He holds a PhD in Finance from the Cass Business School (London City University) and an MA in Economics from University College Dublin. His main research interests lies in the area of volatility modelling and forecasting using high frequency data. He is also interested in the area of Islamic finance addressing issues such as efficiency and risk failure. Dr Izzeldin is also actively engaged in several research programmes in the Middle East and Africa. He has published in the Journal of Applied Econometrics, International Journal of Forecasting, Computational Statistics and Data Analysis and Journal of Economic Behaviour and Organisation.

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EIBF was established in January 2010, through a philanthropic donation from El Shaarani Group, with the objective of promoting intelligent debate and understanding of Islamic business & finance.

It also contributes to a wider research agenda on ethics, governance, and accountability of organisations. The EIBF has contributed significantly to the academic field of Islamic business and finance through the dissemination of research at international conferences and in leading academic journals.

The funding that the centre has attracted is used for research and development activities such as students’ bursaries, research internships, research fellowship positions, research projects, visiting researchers, conference organization, and seminar series. Over four years, the EIBF has organised six successful conferences and workshops that have attracted high profile academics and earned international reputation. Through organising, hosting and participating in many events in 2010-14, the Centre has engaged strongly with academia, industry, the community, and expanded its networks exponentially. In addition, the EIBF Centre has established strong links with local and international businesses, government bodies as well as domestic and overseas academic institutions. These links are based on disseminating knowledge and joint collaboration.

social responsibility & accountability of both financial and non-financial institutions.

The EIBF Centre research is presented in international conferences, seminars and leading academic journals (such as Journal of Banking & Finance, Journal of Economic Behaviour & Organisation, International Review of Financial Analysis and Journal of Business Ethics) and its activities attracted press coverage in top outlets (such as the Financial Times, the Times and the Gulf News).

The EIBF founding director, Professor Abdelsalam, coedited the first special issue that is fully dedicated to “Islamic Finance� in the internationally ranked Journal of Economic of Economic Behaviour and Organisation.

Future Plans As an integral part of an elite Business School, the EIBF Centre is committed to creating and transferring knowledge that enables, innovates and inspires, as well as supporting and influencing organisations and their leaders. This is a positive contribution to industry and society at a regional, national and international level.

The EIBF will continue providing its research output to conferences, seminars, executive training courses and through publications in top academic journals in the areas of Islamic banking & finance, corporate governance, accountability and socially responsible investment and ethical finance.

About the Founding Director of EIBF

Research The EIBF is conducting cutting-edge academic and industry relevant research into contemporary issues of Islamic business and finance, and is seeking to fill gaps in the current discourse. The EIBF team members are currently involved in research projects in the following areas: Banking Industry Research: Comparing the financial and social performance of conventional and Islamic banks.

Economic Development & Political Economy: Covering areas such as Islamic microfinance, poverty reduction, diversity and equality.

Mutual Funds: Exploring the comparative performance of conventional, socially responsible and Islamic funds.

Ethics, Governance & Accountability of Organisations: Focusing on the transparency, governance,

Dr. Omneya Abdelsalam is currently a Professor of Accounting and Islamic Finance at Durham University Business School. She holds a PhD from HeriotWatt University and is a fellow of the Higher Education Academy. She is the founding director of EIBF and is managing its research projects until October 2014. She held teaching appointments at Aston University, Heriot-Watt University, Mansoura University and the American University of Sharjah.

Her main research interests lie in the area of corporate transparency, governance, social responsibility, and accountability as well as performance measurement.

This covers both Shariah compliant, conventional organisations in the MENA region, South East Asia and Europe. She published in top academic journals such as Journal of Banking & Finance, Journal of Economic Behaviour and Organisation, Journal of Business Ethics and Journal of International Accounting Research.

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Name

Email

Affiliation

Abdelhafid Benamraoui

a.benamraoui@westminster. ac.uk

University of Westminster

AbdelKader Ouatik el Alaoui

abdelkader.alaoui@gmail.com

International Centre For Islamic Finance (INCEIF)

Abdelrahman Zaghloul

zaghlash@aston.ac.uk

Aston Business School

Abdelsalam Omneya

o.h.abdelsalam@durham.ac.uk

Durham University

Abdullah Abooslman Alshawway abooslman@gmail.com

Bangor University

Abdullah Al-maghzom

Abdullahal-maghzom@connect. glos.ac.uk

Abdullah Iqbal

A.Iqbal@kent.ac.uk

University of Kent

Abul Hassan

ahfarooqi@kfupm.edu.sa

King Fahd University of Petroleum and Minerals

Ahmet Suayb Gundogdu

agundogdu@isdb.org

Islamic Development Bank

Akrum Helfaya

a.n.ekara.helfaya@keele.ac.uk

Keele University

Ali Saeed Alshamrani

drali2012@hotmail.com

Taif University

Alija Avdukic,

alija.avdukic@durham.ac.uk

Durham University

Almutasembilla Allam

abp3cf@bangor.ac.uk

Bangor University

Amal Essa AlAbbad

malak2000a@yahoo.com

Rutgers, The State University of New Jersey

Ameen Shugaa

ameenhezam@gmail.com

International Centre For Islamic Finance (INCEIF)

Amine Ben Amar

amine.benamar@gmail.com

University of Paris Dauphine

Anass Patel

anass.patel@gmail.com

Paris 1 Sorbonne

Anees Razzak

aneesrazzak0@gmail.com

Antonios Chantziaras

t-chantzia@aston.ac.uk

Aston Business School

Anwar Bilal

anwarb@aston.ac.uk

Aston Business School

Asharaf Khallaf

achazi@aus.edu

Asim M. Riaz

mriazasim@yahoo.com

Queen Mary, University of London

Asm Sohel Azad

s.azad@deakin.edu.au

Deakin University

Azhari Wahid

muhamadazhari.wahid@gmail. com

Buerhan Saiti

borhanseti@gmail.com

Universiti Kuala Lumpar

Charilaos Mertzanis

charilaos.mertzanis@aucegypt. edu

American University In Cairo

David Kilgour

david.kilgour@durham.ac.uk

Durham University

Deepa Bannigidadmath

deepa.bannigidadmath@deakin. edu.au

Deakin University

Elena Nikolova

Elena.nilolovaa@gmail.com

Aston Business School

Emili Tortosa-Ausina

tortosa@uji.es

Universitat Jaume I

Essam Abdelrahman

eaaa1e11@soton.ac.uk

University of Southampton

Fazial Manjoo

faizalmanjoo@yahoo.co.uk

The Markfield Institute of Higher Education

Fedi Kalai

kalai.fedi@gmail.com

University of Lille 1, France

Galal Ismail

geg_ismail@yahoo.co.uk

Gerry Steele

g.steele@lancaster.ac.uk

Lancaster University

Ginanjar Dewandaru

ginanjardewandaru@gmail.com

International Centre For Education In Islamic Finance

Hafiz Hassan

Hassanhm1@aston.ac.uk

Aston Business School

Hasan, Iftekhar

ihasan@fordham.edu

Fordham University and Bank of Finland

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Hashin Jusoh

hashim@unisza.edu.my

Universiti Sultan Zainal Abidin

Hassan Daher

hassanydaher@gmail.com

International Centre For Islamic Finance (INCEIF)

Heba Abou-El-Sood

h.abouelsood@gmail.com

Cairo University

Ibrahim Fatnassi

ibrahim.fatnassi@isg.rnu.tn

High Institute of Management (ISG), University of Tunis

Imane Abdelfattah Helmy

mane.helmy@gmail.com

Ioanna Baltera

io_bal@hotmail.com

Israk Ahmaddsyah

isra.leicester@gmail.com

Markfield Institute of Higher Education

Jardine Husman

J.A.Husman@warwick.ac.uk

University of Warwick, Bank of Indonesia

Jill Johnes

j.johnes@lancaster.ac.uk

Lancaster University

Kerbouche Mohammed

kerbouche81@gmail.com

University of Mascara

Khaled Alhabashi

KhaledAlhabashi@connect.glos. ac.uk

Dirham Capital Co.

Khelifa Mazouz

mazouzk@cardiff.ac.uk

Cardiff University

Khurram Raja

khurram.raja@zu.ac.ae

Zayed University

Kok Seng Kiong

s.k.kok@wlv.ac.uk

University of Wolverhampton

Konstantinos Gavriilidis

kg25@stir.ac.uk

University of Sterling

Laurent Weill

laurent.weill@unistra.fr

University of Strasbourg

Leila Gharbi

leila.gharbi29@yahoo.fr

Mahmood Rehman

Mahmood@ieif.co.uk

Majed Alharthi

majed.alharthi@plymouth.ac.uk

Plymouth University

Mansour Albarrak

mansour555@hotmail.com

Plymouth University

Marwa Elnahass

m.elnahas@aston.ac.uk

Aston Business School

Marwan Izzeldin

m.izzeldin@lancaster.ac.uk

Lancaster University

Michael Skully

michael.skully@monash.edu

Monash University

Mike Tsionas

m.tsionas@lancaster.ac.uk

Lancaster University

Mohamed El-Komi

mkomi@aucegypt.edu

American University in Cairo

Mohamed Hisham Bin Hanifa

hishamcosmo@gmail.com

International Centre For Islamic Finance (INCEIF)

Mohamed Kroessin

Mohammed.Kroessin@irworldwide.org

Aston Business School

Mohamed Nurullah

M.Nurullah@kingston.ac.uk

Kingston University

Mohammad Abdullah Nadwi

abdullahfaizi99@yahoo.com

Markfield Institute of Higher Education

Mohammed Waleed Alswaidan

eco00127@myport.ac.uk

University of Portsmouth

Mohd Shukor Harun

mohd.harun@plymouth.ac.uk

Plymouth University

Momna Saeed

m.saeed@lancaster.ac.uk

Lancaster University

Mona Said

mona_said@aucegypt.edu

American University in Cairo

Mouna Kessentini

kessentini_mouna@yahoo.fr

Dionsyian Economics Lab, University of Paris

Muhammad Hanif

hanifacma@gmail.com

FAST School of Management

Mustafa Disli

mustafa.disli@ugent.be

Ghent University

Mustapha Sheikh

M.Sheikh@leeds.ac.uk

Leeds University

Nauman Hassan

n.malik3@lancaster.ac.uk

Lancaster University

Nawal Kasim

nawal_kasim@yahoo.com

Universiti Teknologi MARA

Nazrol Kamil Mustaffa Kamil

n_kamil@hotmail.com

International Islamic University Malaysia

Noha El-Bassiouny

noha.elbassiouny@guc.edu.eg

German University In Cairo

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Nongnuch Tantisantiwong

n.tantisantiwong@dundee.ac.uk

Nur Aziah Che Abdul Aziz

nafz0882@gmail.com

Nurhafiza Abdul Kader Malim

nurhafizakader@gmail.com

Universiti Sains Malaysia

Osama El-Ansary

oelansary@yahoo.com

Cairo University

Panagiotis Dimitropoulos

pdimitrop@yahoo.com

University of Peloponnese

Paramjit Gill

gillpk@state.gov

Paul Dawson

paul@ngc3201.com

Lancaster University

Raphie Hayat

raphie.hayat@gmail.com

VU University & SCIEF

Razali Haron

hrazali@iium.edu.my

International Islamic University Malaysia

Rizwan Malik

k1252946@kingston.ac.uk

Kingston University

Sabur Mollah

sabur.mollah@sbs.su.se

Sahar Ata

sahar.ata@hotmail.co.uk

London School of Business and Finance.

Salwana Hassan

salwana@salam.uitm.edu.my

Universiti Teknologi MARA

Samir Alamad

Samir.Alamad@islamic-bank.com

Sherif Ismail

sherif.ismail@plymouth.ac.uk

Plymouth University

Shimaa Elkomy

s.elkomy@surrey.ac.uk

University of Surrey

Sorwar Ghulam

G.Sorwar@Salford.ac.uk

University of Salford

Stergios Leventis

s.leventis@ihu.edu.gr

International Hellenic University

Syed Aun Raza Rizvi

aun@rizvis.net

International Centre For Islamic Finance (INCEIF)

Syed Faiq Najeeb

faiq.najeeb@gmail.com

International Centre For Islamic Finance (INCEIF)

Syed Zulifiqar Ali Shah

zulfiqar.shah@gmail.com

International Islamic University Islamabad

Thornsten Beck

Thorsten.Beck.1@city.ac.uk

Cass Business School

Vasilis Pappas

v.pappas@lancaster.ac.uk

Lancaster University

Waleed Altuwaijri

waleeed2007@gmail.com

Bangor University

Wassim Ben Ayed

benayed.wassem@gmail.com

High Institute of Management, University of Tunis

Wijdan Tariq

wijdantariq@gmail.com

Durham University

Yousef Alwardat

wardat61@yahoo.co.uk

King Abdulaziz University

Yunieta Nainggolan

neta.nainggolan@qut.edu.au

Queensland University

Zairihan Abdul Halim

zairihan.abdulhalim@student. qut.edu.au

Queensland University of Technology

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University of Dundee

Page 37

Page 38

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Monday, 23 June 2014

08.30-09.30 09.30-09.50 09.50-10.40 10.40-11.00 11.00-11.30 11.30-13.00

Welcome Reception and Early Registration Welcome (Sue Cox) Lecture Theatre 1 Keynote Presentation: “Title TBC” (Professor Thorsten Beck) Lecture Theatre 1 Welcome (Professor Omneya Abdelsalam) Lecture Theatre 1 Tea & Coffee Break Academic Sessions M1 P1 P2 P3 Banking

Asymmetric Information LT6

Financial Development LT9

Risk

M2

P4

P5

P6

Sukuk & Student Loans LT3

Islamic Funds I

Banking & Finance

Conceptual I

LT6

LT9

LT10

M3

P7

P8

P9

Financial Risk & Stability I LT3

Microfinance

Islamic Equity Indi- Regulation ces I LT9 LT10

LT3 13.00-14.00

Lunch Break

14.00-15.30

Academic Sessions

15.30-16.00

Tea & Coffee Break

16.00-17.30

Academic Sessions

19.00

LT6

LT10

Conference Gala Dinner / Lancaster House Hotel

Tuesday, 24 June 2014 09.30-11.00

Academic Sessions M4

P 10

P 11

P 12

Islamic Equity Indices II LT3

Financial Crisis

SME Financing

LT6

Accounting Quality & SSB LT9

M5

P 13

P 14

P 15

Behavioral Finance I LT3

Sukuk

Performance of banks LT9

Islamic Premium

11.00-11.30

Tea & Coffee Break

11.30-13.00

Academic Sessions

LT6

13.00-14.00

Lunch Break / Best Paper Award

14.00-15.30

Academic Sessions

LT10

M6

P 16

P 17

P 18

Efficiency of Banks

Conceptual II

LT3

LT6

Behavioural Finance II LT9

Financial Risk & Stability II LT10

15.30-16.00

Tea & Coffee

16.00-17.30

Academic Sessions M7

17.30

LT10

LT3 End of Conference

TIMBERL AK E Statistics • Econometrics • Forecasting

P 19 P 20 Islamic Equity Indices Islamic Funds II III LT6 LT9

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P 21 Miscellaneous LT10