Farrukh Ijaz

Determinants of Profitability of Islamic Banking Industry: An Evidence from Pakistan

The financial sector plays a vital role in the expansion and growth of an economy. The essential factor for the financial growth of a country is a stable banking system. Over the past few years, Islamic banking industry of Pakistan has grown substantially, however, it faces many challenges regarding its financial stability. This study tries to assess factors that affect the profitability of Islamic banking industry over the period of 2007 to 2014. Return on assets (ROA), return on equity (ROE), and earnings per share (EPS) are used as dependent variables. Bank’s size, gearing ratio, non-performing loans (NPL) ratio, operational efficiency, asset composition, asset management, capital adequacy ratio, deposit ratio, gross domestic product (GDP), and consumer price index (CPI) are used as independent variables. Findings of the study indicate that measures of Islamic banking profitability are significantly affected by bank-specific factors such as gearing ratio, asset management, deposit ratio, and NPL ratio and external factor such as CPI.

Impact of Income Components in Determine the Market Value - Evidence from Pakistan Cement Industry

The main advantage of firm market value reference is that it provides some indications about the relevant data required by the investors. An income statement shows the financial operation of an entity over a period of time, which investors assumed to be the primary criteria for evaluating the financial position. The present paper provides a comprehensive study of the value relevance literature. This study investigates which income levels and components have an impact on the market value. Statistical population of cement companies listed at Karachi Stock Exchange over the time period of 2006-2011 is taken as a whole and also divided into large, medium and small categories as well on the basis of their market size to check individual relationship among income components and market value. Linear multiple regression, one sample test and coorelation analysis applied for data analysis. The results indicate that market value has strong relation with the income components except the net income variable which has insignificant relation. However, small and medium firms have no statistical impact on the value relevance of income components. These results were consistent with previous studies of Kallunki et al. (1998) and Hadi (2006), who found positive impact large firms have on the market value of a firm. Market value relevance with respect to income components of companies varies according to their size, which means the firm size is an important aspect in value relevance of financial figures data. Large firm’s investors have different source of information and resources available with them compared to those of medium or small firm’s investors.