Universitas Muhammadiyah Yogyakarta, Yogyakarta
COURSE OUTLINE
Kulliyyah / Institute
Faculty of Economics and BusinessDepartment / Centre
IPIEFProgramme
Bachelor in Economics Name of Course / Mode Islamic Capital Market Name (s) of Academic staff /Instructor(s) Abdul Qoyum, SE.I, M.Sc.Fin Semester and Year Offered 2019/2020
Status Core
Level Undergraduate
Total Student Learning Time (SLT)
Face to Face
Total Guided and Independent Learning
Lecture Consultation Practical Others
42 10 44 34 130
Credit Value (hours) 3 Co-requisites (if any) None
Course Objectives
This course expects to provide students with the:
1. advanced knowledge of Islamic financial system and its regulatory framework and environments,
2. analytical understanding of Shari’ah concepts used in financial markets and market structure, and
3. skills to analyze Islamic financial instruments in terms of purpose, structure, and pricing
Learning Outcomes
At the end of the course, students should be able to:
1. understand the regulatory framework governing Islamic money and capital markets
2. critically analyze Islamic money and capital markets instruments based on economic and Shari’ah principles
3. apply principles learnt to structure Islamic money and capital market instruments
4. calculate the value and yield of Islamic money and capital market
instruments
5. demonstrate analytical and teamwork skills in analyzing and structuring Islamic money and capital market instruments
Transferable Skills:
Skills and how they are developed and assessed, project and practical experience and internship (either one)
Skills How they are developed Assessment method Practical Skills Class exercises and
examinations
Mid-Term Exam &
Final Exam Research Skills Case studies and
presentations
Group assignment and presentation Communication Class discussions and
presentations
Group assignment and presentation
Teaching-Learning / assessment strategy
Type of Assessment Description
Lectures Co-operative learning
Projects-assignments Combination of coursework evaluation and final written examination
Course Synopsis
This course covers Islamic financial markets including money market, bond and sukuk markets, stock market, foreign exchange market, derivatives markets and commodities market. Also included are principles, regulatory framework of Islamic financial markets, collective investment schemes and selected case studies of Islamic securities
Mode of Delivery Lecture and case study
Assessment Methods and Type/Course Assessement State weightage of each type of assessment.
LO Method %
2, 3, 4 & 5 Class Presentation 10
2, 3, 4 & 5 Case Analysis 25
2, 3, 4 & 5 Paper 25
1, 2, 3 & 4 Mid-Term examination 20
1, 2, 3 & 4 Final Examination 20
TOTAL 100
Mapping of course / module to the Programme Learning Outcomes
Learning Outcome of the course Programme Outcomes
01 02 03 04 05 06 07 08 09
1. Understand the regulatory framework governing Islamic money and capital markets
√ √ √ √ √
2.
Critically analyze Islamic money and capital markets instruments based on economic and Shari’ah principles
√ √ √ √ √ √
3. Apply principles learnt to structure Islamic money and capital market instruments
√ √ √ √ √ √ √ √
4 Calculate the value and yield of Islamic money and
capital market instruments √ √ √ √ √
5
Demonstrate analytical and teamwork skills in analyzing and structuring Islamic money and capital market instruments
√ √ √ √ √ √ √ √
Content outline of the course / module and the SLT per topic
Weeks Topics Learning
Hours
Task/Reading (author/page) 1 Functions and Roles of the Financial System: Islamic and
Conventional
• Overview of financial system
• Objectives and characteristics of Islamic financial system
• Roles and functions of financial market
• Financial assets, money and financial transactions in the global financial system
3 Course Notes. SC (2009),
Introduction to Islamic Capital Market, Chp.1
2
Regulatory Framework of Islamic Money and Capital Market
• Overview of Islamic Money and Capital Market Regulatory Framework
• Regulatory Authorities : the Roles of Bank Negara Malaysia and Securities Commission
• Guidelines on Islamic Money and Capital Markets
3 Course Notes. SC (2009),
Introduction to Islamic Capital Market,Chp.4.
SC (2009), Regulatory Requirements, Chps.1-4.
3 & 4 Islamic Money Market
• Overview
• Functions of Islamic Money Market
• Comparison between Islamic and Conventional Money Market
• Islamic Interbank Market
• Islamic Money Market Instruments
• Islamic Money Market calculations
3 3
Course Notes
5 & 6 Sukuk
• Overview of Sukuk
• Comparison between Sukuk, Bond and Shares
• Primary and Supplementary Shariah Principles used in Sukuk based on SAC, Securities Commission
• Overview of Sukuk Types and Classifications
• Asset-Based Sukuk
• Asset-Backed Sukuk
• Hybrid Sukuk
3 3
Course Notes.
Adam & Thomas (2004), Chps.3, 4
& 5.
AAOIFI Shari’ah Standard No.17, Clifford Chance (2009), DIFC Sukuk
Guidebook. SC (2009), ICM Series: Sukuk, Chps. 7-13.
7 Valuation of Sukuk
• Sukuk Yield
• Sukuk Price
3 Course Notes.
8 Shariah Compliant Equity
• Overview of Shariah Compliant Ordinary Shares
• Comparison between Ordinary Shares, Preference Shares, Cumulative and Non-cumulative Preference Shares
• Differences between Shariah Compliant Shares and conventional Shares
• Shariah Compliant Stock Screening
3 Course Notes, Jaffer (2004), Chps 1 & 2.
Omar (2002)
9 Islamic Collective Investment Funds
• Overview of Islamic Collective Investment Funds
• Islamic financial contracts applied in fund management
• Objectives of Islamic Collective Investment Funds
• Types of Islamic Collective Investment Funds
• Islamic Equity Unit Trusts
• Sukuk Unit Trusts
• Islamic Money Market Unit Trusts
• Purification of Earnings of Fund
•
3 Course Notes, Jaffer (2004).
Chp.3.
Ahmed (2001)
10 Islamic Index
• Overview of Islamic Index
• Index Computation Methodology
• Types of Shariah Indexes
• Index Screening and Review Process
3 Course Notes.
Jaffer (2004).
Chp.4
11 Islamic Real Estate Investment Trusts (I-REIT)
• Overview of REIT?
• Governance Structure of REITs
• Types of REITs
• Differences between Islamic REITs and Conventional REITs
• Guidelines to determine Islamic REITs
3 Course Notes, Al Aqar REITs Prospectus
12 Islamic Exchange-Traded Funds (I-ETF)
• Overview Islamic Exchange-Traded Funds?
• Comparison between ETF, shares and Unit Trusts
• ETF Structure
• Differences between Islamic ETF and Conventional ETF
• Shariah Compliant Stock Screening
• Purification of Earnings of Fund
3 Course Notes, Dow Jones Islamic Market Malaysia Titans 25 Prospectus (2008)
13 Islamic Derivatives Markets
• Overview of Derivative Instruments?
• Forward Contracts and Shariah Perspectives
• Futures Contracts and Shariah Perspectives
• Options and Shariah Perspectives
• Swaps and Shariah Perspectives
3 Course Notes Obaidullah (2005)
Iqbal & Mirakhor (2007), Chp.9
14 Islamic Structured Products
• Overview of Structured Products
• Types of Islamic Structured Products
• Equity-linked products
• Commodity-linked products
3 Course Notes.
Iqbal & Mirakhor (2007), Chp.9.
SC (2009). ICM Series:Sukuk, Chp.14.
Required references supporting the course
Books
Al-Baraka (2001). Resolutions and Recommendations of Al-Baraka Symposia on Islamic Economy, 1981-2001. Jeddah: Al-Baraka.
Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). (2004). Sharia Standards: 1425-6 H/2004-5. Bahrain: AAOIFI.
Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI). (2004). Accounting, Auditing and Governance Standards for Islamic Financial Institutions: 1425-6 H/2004-5. Bahrain:
AAOIFI.
Adam, Nathif J. & Thomas, A. (2004). Islamic Bonds: You Guide to Issuing, Structuring and Investing in Sukuk. London: Euromoney.
Ahmed, Osman Babikir. (2001). Islamic Equity Funds: The Mode of Resource Mobilization and Placement. Jeddah: IRTI.
Ali, Salman Syed. (2005). Islamic Capital Market Products: Development and Challenges. Jeddah:
IRTI.
Ali, Salman Syed. (2008). Islamic Capital Markets: Products, Regulation and Development. Jeddah:
IRTI.
Archer, Simon. & Karim, R. (2007). Islamic Finance: The Regulatory Challenge. Singapore: John Wiley.
Ayub, Muhammad. (2007). Understanding Islamic Finance. New Jersey: Chichester: John Wiley.
Bank Negara Malaysia. (2007). Shari’ah Resolutions in Islamic Finance. Kuala Lumpur: Bank Negara Malaysia.
Clifford Chance. (2009). DIFC Sukuk Guidebook. Dubai: Dubai International Financial Centre.
www.difc.ae/index.php/download_file/-/view/353/
Iqbal, Zamir & Mirakhor, A. (2007). An Introduction to Islamic Finance: Theory and Practice. Singapore:
John Wiley.
Jaffer, Sohail (ed). (2004). Islamic Asset Management: Forming the Future for Sharia-Compliant Investment Strategies. London: Euromoney.
Mohd Azmi Omar (2002). “Investment in Stock Market: Some Issues from the Islamic Perspective”, in Konsep Perniagaan Islam. Universiti Brunei Darussalam
Obaidullah, Mohamed. (2004). Islamic Financial Markets: Towards Greater Ethics and Efficiency.
New Delhi: Institute of Objective Studies.
Obaidullah, Mohamed. (2005). Islamic Financial Services. Jeddah : King Abdulaziz University.
RAM Rating Services Berhad, (2008). Malaysian Sukuk Market Handbook. Kuala Lumpur: RAM Rating Services Berhad.
Rayner, S.E. (1991). The Theory of Contracts in Islamic Law. 1st edition. New York: Graham and Trotman.
Rose, Peter. S. (2008). Money and Capital Markets. 10th edition. McGraw Hill Higher Education.
Securities Commission. (2002). Resolutions of the Securities Commission Syariah Advisory Council. Kuala Lumpur: Securities Commission Malaysia.
Securities Commission. (2004). Capital Market Development in Malaysia - History and Perspectives.
Kuala Lumpur: Securities Commission Malaysia.
Securities Commission. (2004). Guidelines on Issuing of Islamic Securities. Kuala Lumpur: Securities Commission Malaysia.
Securities Commission. (2009). Islamic Capital Market Series : Introduction to Islamic Capital Market.
Kuala Lumpur: Lexis-Nexis.
Securities Commission. (2009). Islamic Capital Market Series : Islamic Commercial Law. Kuala Lumpur: Lexis-Nexis.
Securities Commission. (2009). Islamic Capital Market Series: Regulatory Requirements, Legal Documentations, Accounting, auditing and Taxation in the Islamic Capital Market. Kuala Lumpur: Lexis-Nexis.
Securities Commission. (2009). Islamic Capital Market Series : Islamic Equity Market. Kuala Lumpur:
Lexis-Nexis.
Securities Commission. (2009). Islamic Capital Market Series : Islamic Securities (Sukuk) Market. Kuala Lumpur: Lexis-Nexis.
Securities Commission. (2009). Islamic Capital Market Series : Valuation of Securities. Kuala Lumpur:
Lexis-Nexis.
Securities Commission. (2009). Islamic Capital Market Series : Sukuk. Kuala Lumpur: Sweet &
Maxwell Asia.
Vogel, F.E., & Hayes, S. (1998). Islamic Law and Finance: Religion, Risk and Return. Hague: Kluwer Law International.
Journal Articles;
Ahmed, H." Determinants of Profit Sharing Ratio in Project Financing: A note." Islamic Economic Studies Vol. 9No.l. September 2001: 41-45
Anas Zarqa, Project Evaluation and Time value-Discounting, Lessons in Islamic Economics, Vol 2, IRTI, Islamic Development Bank, 1998.
Badri, A.A, M Kadir, A Aidham and Partners." The Syariah Adviser in Islamic Securities Issues: Time for Role Refinement." Islamic Finance Bulletin. Issue #3, RAM March 2004: 14-19
Bashir, A.H.M." Determinants of Profitability in Islamic Banks: some Evidence from the Middle East."
Islamic Economic Studies Vol. 11 No.l. September 2003:31-57
Choudhury, M.A." Financial Globalization and Islamic Financial Institution: The Topics Revisited."
Islamic Economic Studies Vol. 9 No.l. September 2001:19-38
Khan, M.F. "Cost of Capital for an Islamic Firm: The Case of the Islamic Development Bank (IDB)."
Islamic Economic Studies Vol.4 No.l. December 1996: 67-72
Mirakhor, A." Cost of Capital and Investment in a Non-interest Economy." Islamic Economic Studies Vol.4 No.l. December 1996: 35-46
Obaidullah, M." Financial Engineering with Islamic Options." Islamic Economic Studies Vol. 6 No.l.
November 1998: 73-103
Rosly, S.A." Islamic Bonds-Asset or Debt Securitization." Islamic Finance Bulletin. Issue #3, RAM March 2004: 25-28
Rosly, Saiful Azhar and Sanusi Mahmod. "Application of Bay' al-Inah in Malaysian Financial Markets." Arab Law Quarterly, September 2001.
Rosly, Saiful Azhar, and Azizi Che Seman. "Juristic Viewpoints on Bay ' Al- 'Inah in Malaysia:
A Survey." HUM Journal of Economics and Management, Volume 11, No. 1, December 2003.
Saadallah, Ridha, ‘Concept of Time in Islamic Economics”. Islamic Economic Studies Vol.2 No.1 1415H (1994).
Wan Abdul Rahim Wan Mohamed Ali. "Securitization of Debt Financing: The Islamic Alternative."
Seminar on Islamic Private Debt Securities (IPDS), Securities Commission Malaysia, September 2001.
Zarqa, M.A "Istisna" Financing of Infrastructure Projects Islamic Economic Studies Vol. 4 No. 2. May 1997:67-74
Prepared by:
_______________________
Abdul Qoyum, SEI, M.Sc.Fin
Checked by:
_______________________
Name Head
Approved by:
_______________________
Name Dean
