Islamic Bank’s Financial Performance Indicators

Financial performance is pertinent in verifying the strength and survival of a company or business as the market player in the industry. However, there is an element which applied in the conventional bank but been prohibited to be applied and recognized by Islamic bank which is riba’ (interest) element. Conventional and Islamic banks have different practice in doing business which conventional bank would generate their main income from interest charged, but, Islamic bank is prohibited involve in riba’ (interest) practice. Unfortunately, financial performance of Islamic banks currently still be measured by conventional performance measurement which widely be measured by financial ratios. Since the recognition and approval of interest from these two types of bank is differ, hence, there is a need for different performance measurement indicators. In order to develop a unique indicator for financial performance, it should be refer to the objective of establishing the business. As for Islamic bank, supposedly the establishment of the institution is to fulfill the maslahah and shouldn’t be focused on profit-earnings as the priority.It is suggested Islamic banks should put maslahah and Maqasid al-Shari'ahas the main framework for Islamic financial performance measurement indicators. Hence, further study need to be done on reconstructing the pure framework of Islamic financial performance measurement

Hi-Viz Florescent SOTRA

Missing important documents while travelling might create disastrous problems as it can affect traveling enjoyment. When travel, people will carry several items such as identification card, passport, flight ticket, boarding pass, credit card, cash, ATM cards and mobile phone. This can create a possibility of misplace or worse, missing things especially for disorganized people. Therefore, a proper new travel organizer can help travelers to place all their belongings for easy retrieval. The main product feature is a multi-size compartment to store different things while traveling. Another important element is it’s made from a combination of traditional Malay songket and glow in the dark fabric as a covering theme. The decision to choose songket as a theme is due to the current usage of this fabric. Nowadays, the use of songket is limited to special occasions only such as wedding, cultural performance and festive season like Aidilfitri celebration. Meanwhile, glow in the dark fabric used to ease the process of searching for travel organizer in traveler’s bag or luggage. Travel organizer been chosen as an instrument for promoting songket because it been widely used by travellers who travel locally and internationally. This could be further realized through collaboration with local airlines such as Malaysia Airlines. As a conclusion, SOTRA could be a solution for proper storage of travel items and help to promote and ensure the sustainability of songket

Macroeconomic Variables Influence on Stock Market Performance

Investors should consider stock market performance when making an investment decision. Both economic and non-economic factors influence the stock market's performance. Previous research, primarily from developed markets, has revealed that macroeconomic factors significantly impact stock returns. Economic forces are used in this paper to investigate the significant relationship between selected macroeconomic variables, the Malaysian stock return index for the financial sector, and the Bursa Malaysia Finance Services Index. The macroeconomic variables examined are inflation (INF), money supply (M.S.) and the real effective exchange rate (REER). This study's sample consists of 164 time-series observations. The observations are annual secondary data obtained from the World Bank, Index Mundi, and the Malaysian Bureau of Statistics from January 1979 to December 2019. Several regression analyses and econometric tests were performed with the interactive software package E-Views 11. The findings of this research paper provide an initial overview and can serve as a valuable foundation for investors' and policymakers' respective investment strategies and policies

Strategic direction setting of DFIS: A qualitative review based on performance model

DFIs are specialized financial institution, appointed by the government and been entrusted for specific mandated roles on socio-economic development. In Malaysia, the mandate of DFIs is merely similar to Islamic economic objective that is for society benefit. Hence, the study been carried out to analyze on the Islamic economic objectives coverage by the DFIs and to explore on the involvement of the Shari’ah committee member of DFIs in the direction setting of the institution. All six Malaysian DFIs which prescribed under DFIA 2002 been included in the study. The result from content analysis shows that there is one Maqasid dimension which not been covered in the DFIs’ vision and mission statement. Furthermore, there is none DFI covers all nine PMMS model’s dimensions as the most covered is six dimensions. Based on interviews, it is found that the Shari’ah committee member is not involved directly in the direction setting of the institution but rather involved in the supervision and assisting the DFIs in Shari’ah matters. It is recommended the DFIs to shape their direction towards fulfilling the Islamic economic objectives since they are mandated so besides their intent to be as full-fledged Islamic. In ensuring the truthful attainment of Islamic economic objective, it is also suggested the Shari’ah committee member to be included as they could contribute on Maqasid Shari’ah perspective in determining and shaping the strategic direction of the institution

Malaysian Development Financial Institutions And Islamic Banks Strategic Direction Setting: A Thematic Review Based On PMMS Performance Model

Vision and mission statement is the main reference of a firm which would direct them to the ends that they have set for themselves. For companies who striving in Islamic industry (products and services), fulfillment of Maqasid al-Shariah should be as their main focus in directing them to achieve their success which should contribute to Islamic economic attainment. However, there are studies found that profit-maximization is still to be the dominant direction of Islamic financial institutions. Hence, the study been conducted to assess the direction setting that have been set by Islamic Banks (IBs) and Development Financial Institutions (DFIs) in Malaysia who are among the key players in contributing to the country’s economic development. The study adopt PMMS model in performing the thematic review on DFIs and IBs vision and mission statement. Six DFIs and ten local IBs been included in the study. The study is aiming on identifying the (1) fulfillment and (2) concentration of existing direction setting of Malaysian DFIs and IBs on all three concepts and nine dimensions of Maqasid-al Shariah. It is found that both DFIs and IBs have covered all three themes of Maqasid-al Shariah, however, both types of financial institutions have different concentration on Maqasid concept and thematic direction. Besides on findings of one untagged dimension by both DFIs and IBs, the result of the study is hope to further suggest on the performance evaluation framework of the DFIs and IBs as it should be referred to their own strategic direction setting especially for fulfilment of time-series or vertical analysis for performance evaluation

Embedding Micro-Credential Concept in Financial Management Modular Course

Micro-Credential is currently a new culture in offering training and short-courses in Malaysia. Following the Covid-19 pandemic outbreak, many Micro-Credentials have been developed and offered, and applicants have various choices whether to enroll from local or international provider. Micro-Credentials give the flexibility for the participants to acquire knowledge and skills at their own convenient pace, place and time. Due to these advantages and the similar objective of Micro-Credential method, the concept has been embedded into a Modular Course on Module 3 of Financial Management. The objective is to expose students to experience the concept of Micro-Credential learning experience as advancement to a blended learning method and to analyze the students’ performance before and after the concept was applied. Two analyses have been made [1] Comparing students’ performance on the same assessment in different semesters (Test on Module 3); [2] Comparing students’ performance on different assessments in the same semester (Quiz on Module 1 vs. Test on Module 3). The first analysis found that the performance of the students increased significantly from 50.40% to 77.45% whereas in the second analysis, the result also shows better performance from 74.6% to 77.45%, in which historically, the result would usually be lower. Therefore, it can be concluded that the concept of Micro-Credential has a positive impact in this Modular Course. It is suggested that educators could explore and embed the Micro-Credential concept as part of their teaching and learning delivery method as an advancement to the substitute blended learning mode

A vector error correction model (VECM) approach in explaining the relationship between interest rate and inflation towards exchange rate volatility in Malaysia

The exchange rate is one of the most important determinants of a country's relative level of economic health. Exchange rate plays a vital role in a country's level of trade, which is critical to most free market economies in the world. This paper is an attempt to analyze the relationship between interest rate, inflation rate and exchange rate volatility in Malaysia covering the period between 1999-2009. This paper used time-series Vector Error Correction Model (VECM) approach of stationarity test, cointegration test, stability test and Granger causality test. Impulse Response Function (IRF) has also been generated to explain the response to shock amongst the variables. The results show that the inflation rate impacts the interest rate as indicated by Granger-cause. Subsequently the interest rate influences the exchange rate as shown by the Granger cause test. Taking into account a long term relationship, interest rate moves positively while inflation rate goes negatively towards exchange rate volatility in Malaysia. The implication of this study is that increasing the interest rate can be efficient in restraining exchange rate volatility. Future researchers should attempt to use panel data and cover longer study duration of above10 years by using other variables

A study on the short and long run determinants of purchasing power parity in Malaysia

Purchasing Power Parity (PPP) concept is founded on the law of one price; which is the idea that in the absence of transaction costs, identical goods will have the same price in different markets. This concept is particularly prominent in three ways; one (1) it theorizes the exchange rate determination; two (2) it can provide a reference point against which the current exchange rate can be deemed to be ''under or over-valued" relative to its PPP level; and three (3) irrespective of whether PPP will ever occur in the real world, deviations from it must be taken into account in making cross-regional comparisons of productivity. The basic idea of this study revolves around determining whether or not short- and long-run causality relationships exist between the PPP and the selected macro variables in the Malaysian context. Using annual time-series data ranging from 1977 to 2009, a time-series analysis methodology was conducted by regressing the values of PPP against four macro variables namely; Real Exchange rate, Consumer Price Index, Interest Rate and Money Supply. The study had discovered that all of the explanatory variables were related to PPP in the long-run, in which the PPP was negatively related to the Real Exchange Rate and Money Supply and positive in the case of Consumer price Index and Interest Rate. In addition to that, the PPP was also found to be Granger-caused by the Real Exchange Rate, Interest Rate and Money Supply. However, no such relation was found for Consumer Price Index. Since all of the variables were found to significantly influence the PPP, future studies could also incorporate other macro variables such as economic growth and net export into the model

Impact of export and gross domestic product towards foreign direct investment inflows in Malaysia

Malaysia has been encouraging Foreign Direct Investment (FDI) inflows not only for its role in technology transfer but also for its economic contribution. Identifying the factors affecting the FDI is important in explaining the Malaysian economy performance. Therefore, the aim of this study is to investigate the impact Of Export (EXP) and economic growth on FDI inflows performance in Malaysia for a period of 30 years from 1979 to 2008 using the Vector Error Correction Model (VECM). In this paper, the economic growth shall be denoted by the Gross Domestic Product (GDP). 'Granger no causality test' or mostly know as Causality Test was used to test the direction of causality between the variables whereas Johansen Cointegration Test was employed to gauge the long run relationship. According to the findings, GDP 'granger cause' FDI runs unidirectionally on a short term basis. Johansen test for determining cointegration showed that the GDP has significant positive long run relationship with FDI inflows. In contrast, there was an inverse relationship between EXP and FDI inflows. Results also show that FDI, EXP and the GDP series in Malaysia are I (1) series. In conclusion, the ability of a country in manipulating its' own resources is significant in generating the economic growth. It is recommended for future researchers to include other economic indicators such as interest rate, exchange rate and inflation rate in explaining additional factors contributing to FDI inflows

Conceptual insights on factors shaping Takaful Technology (TakaTech) adoption in Malaysia

The takaful and insurance industry is profoundly transformed, driven by rapid advancements in digital technology and the Internet of Things (IoT). While InsurTech has revolutionised traditional insurance practices, the acceptance of Takaful Technology (TakaTech) among consumers in Malaysia remains uncertain. This study aims to investigate the determinants of TakaTech adoption, focusing on attitude, subjective norm, relative benefit, and FinTech knowledge. The research is grounded in an extensive literature review and a conceptual framework analysis, drawing from an established Theory of Reasoned Action with relative benefit and Fintech knowledge. This study contributes to understanding consumer behaviour in the takaful industry, addressing a notable gap in current research. The identified determinants offer a detailed comprehension that can guide policymakers and market participants in refining marketing tactics. Takaful companies, armed with insights into customer viewpoints, can strategically promote products, increase market share, and expand commercial operations. It is essential to acknowledge the study's limitations. The conceptual nature precludes the establishment of causal linkages, and the proposed elements are derived from theoretical frameworks. Practical implications include the potential improvement of marketing efforts by tailoring strategies to customer preferences, thereby fostering TakaTech adoption. In conclusion, this research lays the groundwork for future empirical studies in the relatively unexplored field of Takaful Technology. Subsequent inquiries should examine additional factors and provide empirical evidence to authenticate the proposed conceptual framework. These efforts are vital for advancing knowledge in the expanding field of Takaful Technology, promoting continuous growth and innovation within the takaful industry