Journal of Islamic Finance 2019-06-19T09:44:41+08:00 Asst. Prof Dr Nor Razinah Mohd Zain Open Journal Systems <p><em>Journal of Islamic Finance </em>(JIF) is an official publication of IIUM Institute of Islamic Banking and Finance (II<em>i</em>BF), International Islamic University Malaysia (IIUM).</p> <p><br>The journal is designed to provide a platform for researchers, academicians and practitioners who are interested in new knowledge and discussing ideas, issues and challenges in the field of Islamic finance, banking, accounting, business and economics.</p> <p><br>The scope the journal includes, but is not limited to, Islamic banking, Islamic capital markets, Islamic wealth management, issues on <em>Shari’ah</em> implementation and practices of Islamic banking, <em>zakat</em>, <em>waqf</em>, <em>takaful</em> and comparative analysis of Islamic and conventional financial institutions. The journal is published biannually in June and December and all articles are in English.</p> <p>&nbsp;</p> <p><strong>Currently Indexed by</strong></p> <p>Malaysian Citation Index (MyCite)&nbsp;<a href=""><img width="48" height="9" alt="" src="/iiibf-journal/public/site/images/admin/mcclogo.jpg"></a></p> <p>Islamic World Science Citation Database (ISC)&nbsp;<a href=";SrchTxt=journal%20of%20islamic%20finance"><img width="48" height="12" alt="" src="/iiibf-journal/public/site/images/admin/isc_logo.jpg"></a></p> <p>Index Islamicus&nbsp;<img width="30" height="12" alt="" src="/iiibf-journal/public/site/images/admin/Islamicus.jpg"></p> <p>Almanhal&nbsp;<a href=""><img width="55" height="11" alt="" src="/iiibf-journal/public/site/images/abduh/1464267_20120111142256.png"></a></p> <p>&nbsp;</p> <p><strong>Privacy Statement:</strong></p> <p>The names and email addresses entered in this journal site will be used exclusively for the stated purposes of this journal and will not be made available for any other purpose or to any other party.</p> <p><strong>&nbsp;</strong></p> <p><strong>Disclaimer:</strong></p> <p>Opinions expressed in articles and creative pieces published in this Journal are those of the authors and do not necessarily reflect the views of the editors, the editorial board or the publisher.</p> <p>&nbsp;</p> The Dynamics of Malaysian Takaful Market: Challenges and Future Prospects 2019-06-19T09:44:41+08:00 Maizaitulaidawati Md Husin <p>While Islamic finance industry has witnessed a tremendous growth across the globe, one of the markets,<em> takaful</em>, still requires attention in order to strengthen their position in the industry as well to increase their market share over their conventional counterparts. In the first part of this study, an overview of <em>takaful</em> and Malaysian <em>takaful</em> market will be discussed. Next, this paper will deliberate the challenges facing the <em>takaful</em> operators in developing the market and lastly, future prospects of <em>takaful </em>business will be discussed. This study is important to policy maker, practitioner and researcher who are dealing in Islamic finance, especially the <em>takaful</em> market. This study is useful as a guideline to revamp strategies in promoting the market as well as in enhancing the understanding on the local <em>takaful</em> market.</p> 2019-06-18T18:38:33+08:00 Copyright (c) Macroeconomic Impacts on Sukuk Performance in Indonesia: Co-integration and Vector Error Correction Model Approach 2019-06-19T09:44:41+08:00 Siti Aisiyah Suciningtias <p>The performance of Islamic bonds or <em>sukuk</em> can be influenced by many factors, internal and external. This study aims to analyze the long and short-term effects of macroeconomic variables such as BI rate (benchmark interest rate), inflation, exchange rate, changes in world gold prices and world oil prices on the performance of <em>sukuk</em> in Indonesia for the period from 2014 to 2017. This study employed the co-integration test to examine the long-term relationship among variables. The Vector Error Correction Model (VECM) model was used in the analysis because the results of the stationary test obtained stationary data at first difference and have long-term co-integration. The results show that the long-term change in <em>sukuk </em>return in Indonesia is influenced by changes in exchange rates, inflation and changes in world gold prices. While in the short term, performance of <em>sukuk</em> is influenced by the previous performance (one and two months), BI rate, exchange rates and world gold prices. Crude oil prices has no significant effect on <em>sukuk</em> performance both in the long and short term.</p> 2019-06-18T18:33:45+08:00 Copyright (c) Structural Development of Ijarah Sukuk: An Appraisal 2019-06-19T09:44:41+08:00 Auwal Adam Sa’ad <p><em>Sukuk</em> structures rely on the performance of an underlying asset or on a contractual arrangement pertaining to that specific asset. This makes <em>sukuk</em> an important facility in Islamic finance since it can be used to provide regular payments throughout the life of the financing plan. This study highlights some important <em>sukuk</em> structures, such as <em>ijarah</em> for asset acquisition and <em>sukuk </em>with a sale and lease-backed structure. Additionally, this study suggests some important proposals to help overcome the <em>Shari’ah </em>issues in <em>sukuk </em>structures. This study suggests that<em> sukuk</em> structures involving the combination of sale and lease-backed contracts should involve a third party who enters into the <em>Ijarah </em>transaction with the investors rather than the originator himself. A benefit of this change will help avoid <em>Inah Ijariyyah </em>(Inah trick for) in the structure. The <em>sukuk</em> structure for asset securitization on the other hand, should not be traded in the secondary market because it involves a sale of debt for debt which is prohibited according to the<em> Shari’ah</em> principles. As for the forward lease <em>sukuk</em>, <em>sukuk</em> holders should wait for the commencement of the project before trading their <em>sukuk </em>in the secondary markets. This is to ensure that the <em>Ijarah</em> property exists before the sale process began.</p> 2019-06-18T18:28:23+08:00 Copyright (c) Potential Development of SRI Sukuk Models for Higher Learning Institutions in Malaysia based on Wakalah and Waqf 2019-06-19T09:44:41+08:00 Engku Rabiah Adawiah Engku Ali Syed Marwan Mujahid Syed Azman Nor Razinah Mohd Zain Rusni Hassan Salina Kassim <p>Funding for Higher Learning Institutions (HLIs) in Malaysia has become increasingly constrained as the government faces increasing costs and global economic slowdown. Central to this issue is the challenge to raise the funds needed to sustain HLIs’ operations and development. It has therefore become a necessity for HLIs to come up with innovative ways to raise funds and move towards to becoming more self-sustainable. Malaysia can possibly learn from HLIs in the UK, US, and Australia where universities have managed to obtain funds through the capital market by issuing bonds. This paper focuses on exploring alternative financing modes for HLIs through Socially Responsible Investment (SRI) <em>sukuk</em> and Social Impact Bonds (SIBs). The methods utilized in this study are critical review of literature, case study analyses and interview sessions with experts. This study recommends two SRI <em>sukuk</em> models: firstly, in the situation where the proceeds are used for income-generating activities, <em>sukuk</em> based on <em>wakalah </em>is proposed; while secondly for non-income generating activities, a cash-<em>waqf sukuk</em> with temporary and permanent features is suggested. In term of the structure of the <em>sukuk</em>, the returns and repayments of both <em>sukuk</em> are dependent on key performance indicators (KPIs) being achieved. In both cases, it is recommended that the <em>sukuk</em> be issued by a consortium consisting of a number of different universities in order to lower the cost of issuance and fund management, as well as efficiently utilizing resources. It is also recommended that the <em>sukuk </em>is guaranteed by a third party, preferably by the government.</p> 2019-06-18T18:23:36+08:00 Copyright (c) Interest-Free Banking and Finance in Brunei Darussalam: Present Realities and Future Prospects 2019-06-19T09:44:41+08:00 Jibrail Bin Yusuf Hassan Shakeel Shah Mohammad Ayaz Jabal Muhammad Buaben <p>Brunei is vigorously pursuing interest-free banking as a governmental project. This study examines the development of this institution in the country highlighting the present experiences, future prospects, and imminent expectations. Islamic banking and finance has superintended a new economic order in Brunei. Although the system is still at its primary stages, it has been successful and holds good prospects due to political cooperation. Political-will is basic to the fruitful implementation of a new economic order and the efficient Islamization process in Brunei facilitated the establishment of sound socio-cultural and economic foundations. This has vigorously promoted the essential values of Islam. Nonetheless, the ‘call’ for economic diversification has some implications for this institution in the country because diversification invariably exposes an economy to international interest and, more importantly, empowers the private sector. These come with the likelihood for promoting interest-based banking and financial practices. This study, therefore, concludes that Islamic banking has been very successful in Brunei but it still remains vulnerable to non-political future challenges subject mainly to the economic fortunes of the petro-dollar.</p> 2019-06-18T18:12:46+08:00 Copyright (c)