Mahmood Nathie

Towards understanding what Australia’s Muslims really think

Over the past decade, issues concerning Islam and Muslims have featured prominently in public and media discourse. Much of this discourse is stereotypical, anecdotal and often unsubstantiated. Indeed, relative to the extent of comment on Islam and Muslims, few factual data exist on what Muslims really think. This article presents the views and opinions of the Queensland Muslim community based on the findings of a survey conducted at the 2009 Muslim Eid Festival in Brisbane. The findings of this research contradict many of the assumptions made about Australia’s Muslims concerning their views and opinions on a range of social and political issues. The research shows that Muslims highly value Australia’s key social and political institutions, including its democracy, judiciary, education and health-care systems. However, Muslims do express a lack of trust in certain institutions, namely the mass media. Also, consistent with the views of people globally, Muslims are deeply concerned about conflicts in the Middle East as well as the environmental crisis. This article suggests the need for a shift in public discourse to more accurately reflect the commonality, rather than incongruity, between Muslim views, opinions and concerns and those of the wider society.

Sequence of Returns Risk for Islamic Investors

For Islamic investors, sequencing risk is an omnipresent factor for retirement outcomes. This study shows that simple diversification can provide benefits to reducing the impact of sequencing risk. However, the results from the accumulation and distribution phases suggest that retirement products need to consider approaches that go beyond the received set-and-forget approach. The findings point rather to a more dynamic, whole-of-life approach to be adopted by Islamic retirement products.

Facilitating Islamic Finance in Australia

This article considers the emergence of Islamic banking and finance in global financial markets and efforts by governments (through regulatory and tax initiatives) to facilitate it. Recently there have been calls for Australia to become a financial hub – particularly in south East Asia. One aspect of this is the recognition of faith-based financial alternatives in the marketplace. This consideration includes ensuring that tax laws are synchronised and do not unduly hinder or restrict the orderly development of such alternatives. The need for research in this area is critical as some nations (such as the United Kingdom, Malaysia and Singapore) have introduced reforms to facilitate lslamic finance, and there are initial calls in Australia for similar reforms to be considered in Australias quest to become a regional financial services hub.Such changes call for a closer look at tax reforms in ways that may produce tangible benefits to Australia in terms of trans-national banking cooperation, capital and investment flows and tax revenues.

A Fund Flow Study of Investor Migration between Islamic and Conventional Managed Funds in Malaysia

The Malaysian managed fund market provides investors with greater choice between conventional and Islamic equity funds. Widening choice also pose challenges to investors in relation to selection of fund type, manager and portfolio optimization. While aggregate market information reveals the extent of investment in funds, not much is known on investors’ migration between fund types in this dual market. Using net fund flow analyses, this paper addresses this paucity through a comparative study of the movement of investable funds between fund types and managers. Net fund flow studies at individual fund and fund manager level provides a method of overcoming analytical deficiency designed to determine trends in investor’s choice. A sample of large and small Islamic and conventional funds and managers in a new Malaysian economic period is used for the purpose. The methodology compares net fund flows (subscriptions less redemptions) between different classes of funds, expressed through net increase/reduction in cash flow using yearly time intervals. This method follows similar methods in other studies since fund managers are generally loath to provide quantitative data on movements in fund membership for reasons associated with proprietary and management performance. Using reported financial statements and market data, fund flows are determined to evaluate the effect of fund type and size based on market concentration. The analysis is used to determine the extent to which investors’ exercise preference between Islamic and conventional funds. For the selected period, lagged fund flows indicate large net outflows from conventional funds compared to Islamic funds, while net outflows from Islamic funds are insignificant. The mean inflows to Islamic funds are weak for one year but significant for the two years during which negative flows were recorded against conventional funds. Market concentration ratios indicate that three large Malaysian fund managers collectively manage 57% of total funds invested in the retail equity fund market. They also manage 71% of all Islamic equity funds. The concentration ratios also show that two-thirds (68%) of all funds are controlled by five large fund managers. The remaining twenty small market managers account for a mere 13% of the market.

Facilitating Islamic Finance in Australia: Possible Models for Reform

This paper focuses on reform issues currently under consideration by tax and regulatory authorities to facilitate Islamic finance in Australia. The necessity for a comprehensive approach is critical if the government’s desire to promote Australia as a financial services hub is to be realised. However, in pursuing this goal one identified delimiter in attracting Islamic finance remains the current lack of tax parity treatment. It is argued that if such tax reforms are to be implemented, there should be an overarching approach to guide reforms – particularly to ensure that there are no adverse consequences, such as increased complexity and potential for tax avoidance. In addressing these shortcomings and potential barriers, this paper proposes tax reform models aimed at providing guidance in designing appropriate tax measures for consideration by regulatory authorities.