Saadiah Mohamad

A Case for an Islamic Social Impact Bond

While the premise of Islamic finance is often couched in the principle of maqasid al-shariah with claims to social justice and welfare, the impact and contribution to the social sector has been minimal. This paper examines the claim among critics that there is an inherent weakness in the Islamic banking and finance industry in terms of its underdeveloped social sector. We argue that to be true to its spirit, Islamic finance has to have a more inclusive role in the economy by enhancing the proliferation of shariah compliant financial products for solutions in the social sector. The paper also highlights developments of SIB (social impact bond) in the social finance space and draws parallel to similar trends in Islamic finance. The paper provides a case for structuring an Islamic SIB by highlighting the benefits of such structures.

The use of Islamic hedging instruments as non-speculative risk management tools

The objectives of this research were, first, to examine how an Islamic hedging instrument can be used as a risk management tool, second, to identify the factors that influence the demand for Islamic hedging, and third, to examine the challenges faced by an Islamic financial institution in promoting the use of Islamic hedging instruments. This research is an exploratory study and involves a qualitative research methodology using case study analysis. Data were gathered using published literature and information from official websites as well as interviews with industry practitioners on Islamic hedging instruments from Bank Muamalat Malaysia Berhad and CIMB Islamic Berhad. The two banks are selected because they are among the major players in the Islamic hedging market in Malaysia. This study reveals that the Islamic hedging instruments offered to corporate clients by the two Islamic banks under study are Islamic Forex, cross-currency and profit rate swaps, and commodity hedging instruments. This study also suggests that price, documentation, bank reputation, awareness, and ownership are factors that influence the demand for Islamic hedging products. Islamic Shariah-compliant hedging instruments are meant to appeal more to clients who are looking for Shariah-compliant hedging instruments to hedge their risk exposure and less to investors who are looking for speculative ventures to gain large returns much like investing in hedge funds. Its use is still limited and it appears that it is more a question of marketing and branding, as Islamic hedging is still unknown even though the needs for it could easily be established to many corporate clients.

Impact of Mindful Consumption (MC) on Investment Decision: A Study Within Malaysian Individual Investors

Mindful consumption is considered to be a new wave of consumer behaviour. Moreover, as an increasingly educated and financially sophisticated society, Malaysia has the potential to further the trend of mindful consumption in everyday living while, at the same time, contributing towards sustainable future. This paper was designed to extend the line of discussion between the trends of mindful consumption in Malaysian society according to the mindful consumption model by Sheth et al. (J Acad Mark Sci 39:21–39, 2011). This model was adopted in this study as the guiding principle where mindful consumption is premised on a consumer mindset of caring for self, caring for community and lastly caring for nature that reflect behaviourally into temperance with acquisitive, repetitive and aspirational consumption. Correspondingly, this paper focuses on mindful consumption of investors towards investment decision making. In addition, this allows them to tell their own perspective on how mindful consumption impacted their investment decision-making. It is anticipated that by adopting mindful consumption in this study, the reasons towards investor’s investment decision can be identified through their consumption behaviour.