- Language: English
- 245 Pages
- Published: August 2011
- Region: Middle East
Islamic Capital Markets and Risk Management: Global Market Trends and Issues
- Published: June 2009
- Region: Global, Middle East
- Incisive Media
This Executive Report offers for the first time a complete and integrated view on all aspects of Islamic investing and risk management, focusing on all currently existing types of Islamic financial products worldwide. It is a valuable guide for both Islamic and conventional financial institutions.
The Executive Report is a “hands-on”, practical report and is a practitioners’ handbook for practical issues both on investing and risk management (for both conventional and Islamic readers), and although religious issues are included the report does not exclusively focus on religious discussions by Islamic scholars.
Islamic capital markets have a low correlation to other market segments, allowing the selective underweighting of particular sectors and seem to be relatively independent, even from market turbulences like the subprime crisis and the ongoing problems with the markets that we are currently experiencing.
This Executive Report will be of specific value for treasurers (also from non-financial institutions), traders, risk managers, asset managers, financial engineers, product developers, executives in Islamic financial institutions, senior executives of banks, insurance firms, hedge funds, family offices, and pension funds.
This report gives a truly complete overview on both risk management and Islamic investments, which makes it an extremely valuable tool for conventional investors, as well as for Islamic institutions and other interested readers. This is appropriate for researchers, consultants, and policy-makers faced with an increasing complexity of Islamic instruments.
Islamic Finance has been expanding strongly all over the world during the past few years and shows significant product innovation and sophistication. Shariah-compliant products have proven to be attractive also to non-Muslim investors and offer many opportunities, even for non-Islamic institutions. This is due to the fact that up to 50% of the total savings of the Muslim population worldwide are projected to be invested in a Shariah-compliant way within the next five years, making it an extremely fast growing business worldwide.
Furthermore, Islamic instruments are highly useful alternative investments for the diversification of portfolios, as they have low correlation to other market segments, allow the selective underweighting of particular sectors and seem to be relatively independent even from market turbulences like the subprime crisis. As a consequence, the increasing standardisation for derivatives and Sukuk (Islamic bonds), as well as the growing liquidity and organisation of the Islamic capital market offer many opportunities to innovative investors.
On the other hand, risk management of Islamic financial products is a hot issue, still little understood in many aspects, where both conventional and Islamic institutions are facing significant challenges when measuring and managing risks.
Risk management is getting more attention all over the world due to the subprime crisis, and for most Islamic financial institutions, risk management presents specific challenges. This trend is also highlighted by the fact that GARP is currently jointly developing with the Banque du Liban a first-of-its-kind Certificate in Risk Management for Islamic Financial Institutions due to be launched in late 2008.
The Islamic capital market is reaching an important peak of sophistication: almost all conventional products can be readily replicated in a Shariah-compliant way, even the most complex structured products, which is not desirable according to many experts in the industry. This excellent guide will provide you with the necessary information you need to understand Islamic capital markets and current risk management issues effectively in order to operate within this growing market.
Michael Mahlknecht has many years of experience in capital markets and risk management and regularly provides workshops, seminars and consulting services in the area of Islamic finance for universities and as a Director Consulting for his software company, Delta Hedge, based in Vienna, Austria.
He has worked as a risk management expert in consulting, banking, financial regulation and IT, gathering extensive knowledge about integrated risk methods, which range from market, liquidity and credit risk to counterparty risk and operational risk, as well as on complex financial products and private equity risk evaluation. He is the author of various articles about issues as diverse as Islamic finance, the global structured products market, hedging, real-time graphical risk management, credit rating, portfolio credit risk, counterparty risk, data management, and has written an introductory book about Islamic finance.
Moreover, Michael is a board member of the global ERM Academy. He holds a degree in Economics from the University of Innsbruck (specialising in financial markets and risk management). SHOW LESS READ MORE >
Foreword written by Shaykh Yusuf Talal DeLorenzo
Section 1: Islamic Capital Market Instruments
2. Hedging and Islamic Derivatives
3. Islamic Bonds: Sukuk Certificates
4. Islamic Fund Management
5. Islamic Structured Products
Section 2: Islamic Risk Management
6. Risk Management Issues in Islamic Finance
7. Basel II for Islamic Financial Institutions
8. Risk Management for Basic Financing and Investment Modes
9. Risk Management for Islamic Funds
10. Risk Management for Sukuk
11. Risk Management for Islamic Structured Products and Derivatives
“This report is a very useful guide on recent developments in Islamic capital market and risk management in Islamic finance. It is therefore highly recommended for new entrants to Islamic financial services industry and an excellent addition to the Islamic library. The book first treats Islamic financial products and then provides an in-depth analysis of all existing risks associated with these instruments. As a result, a truly integrated and complete view on this class of Islamic financial instruments is given.”
Ijlal Ahmed Alvi,
Chief Executive Officer (CEO) at the International Islamic Financial Market (IIFM),
Manama, Kingdom of Bahrain
“Islamic Capital Markets and Risk Management has brought out the fundamental principles in Shariah in very clear terms, making it easy to comprehend why Islamic instruments and products must be so structured in order to be Shariah-compliant. It has also articulated the risks involved in the operations of such instruments and products which will indeed make the book very useful for existing and potential practitioners in Islamic and conventional financial institutions.”
Datuk Dr. Syed Othman Alhabshi
Chief Academic Officer & Dean of Faculty
International Centre for Education in Islamic Finance (INCEIF), Kuala Lumpur, Malaysia
” It is my sincere hope that industry professionals, whatever their persuasion, will give due consideration to the ideas presented in this book by Michael Mahlknecht. He has done the industry a great service through sharing his ideas, not to mention his considerable abilities as a financial engineer, and he deserves the gratitude of the entire industry.”
Shaykh Yusuf Talal DeLorenzo