Futures Contracts in Islamic Finance: An Analytical Approach

Futures contracts provide a useful means of reducing risk because these are highly liquid instruments that can be entered into or liquidated at any time. However, the debate on the legitimacy or otherwise of these contracts in the Islamic commercial law continues to invoke different contentions. The paper accentuates the fact that futures contracts are at bottom a new phenomenon of this age which have no precedent or parallel in the conventional law of transactions (muamalat). Therefore their legality or otherwise should be looked into with the Islamic viewpoint of general permissibility in relation to transactions. The paper examines a number of jurisprudential and legal issues such as non-existence of the subject-matter, sale prior to taking possession, bai al-kali bil-kali, speculation and hedging, and concludes that futures contracts are allowed to benefit from. However, only hedgers can take advantage of them. These instruments can never be used for purely speculative purposes where making or taking delivery is not intended. Although it is not necessary to pay the complete price to the seller at the time of the contract yet some other precautionary measures such as a bank guarantee or a fair amount of money to be given to the seller should be taken to ensure that pure speculation is scrupulously forestalled and the delivery would certainly be made

Islamic Perspective on Financial Derivatives: Demand for Instruments of Risk Management in Various Businesses of Pakistan

This study was undertaken with the aim of exploring the legitimacy or otherwise of financial derivatives according to the Islamic commercial law, and ascertaining the demand for instruments of risk management in various business and economic sectors of Pakistan. The study drew the conclusion that forward contracts and futures contracts are allowed to benefit from. However, only hedgers can take advantage of them. These instruments can never be used for purely speculative purposes where making or taking delivery is not intended. Although it is not necessary to pay the complete price to the seller at the time of the contract yet some other precautionary measures such as a bank guarantee or a fair amount of money to be given to the seller should be taken to ensure that pure speculation is scrupulously forestalled and the delivery would certainly be made. If a large amount of money is given to the seller at the time of the contract the proscription of bai al-kali bil-kali would no longer be applicable because bai al-kali bil-kali comes about where the settlement by both parties is deferred to a future date, but that is not the case here. This amount of money would later on be adjusted to the total price. Options trading is also permissible because it is simply an extension of the fundamental concept of freedom and legitimacy given by the Shari’ah in relation to commercial transactions. However, those types of financial derivatives which involve riba such as interest-rate futures, interest-rate options, interest-rate swaps and swaptions are ruled out altogether and can never be taken advantage of. Similarly, those derivatives which proceed on gambling, inordinate uncertainty, alcohol, pork and other inadmissible commodities are precluded into the bargain. To carry out the empirical part of the research, 600 questionnaires were randomly given out to the organizations operating in two commercial and industrial cities of Pakistan, namely Lahore and Faisalabad. The goal of the survey was to ascertain the demand for instruments of risk management in various business and economic sectors. The research findings indicated that there is demand for collateral, futures contracts, guarantee, and hatt wa ta’ajjal for credit risk management. As regards market risk management, arbun sale, bai al-salam, forward contracts, futures contracts, istijrar, istisna, and khiyar al-shart are in demand. In relation to currency risk management, foreign currency forwards, foreign currency futures, and foreign currency options are in demand. To mitigate interest-rate risk, forward rate agreements, interest-rate futures, and interest-rate options are in demand. The research findings further represented that a large number of the respondents want to use these instruments, if available, for hedging purposes. The researcher learnt while administering the questionnaires that the respondents who do not want to utilize the instruments or techniques of risk management are either unacquainted with their structure or, quite often, not aware of their adequate and proper use. It was therefore proposed that the Islamic as well as conventional financial institutions had better provide their clientele and other business entrepreneurs with the required risk management counselling. Another issue is germane to the Islamic legal implications of foreign currency options, forward rate agreements and interest rate swaps permitted by the State Bank of Pakistan. The illicit features of these instruments ipso facto make them impracticable for those people who are desirous of using only Shari’ah-compliant instruments. It was thus suggested that the State Bank of Pakistan should also introduce other Shari’ah-compliant instruments, that is to say istisna, salam, bai al-arbun, istijrar, forward contracts, futures contracts, options and Islamic swaps, and allow Islamic as well as conventional banks to employ them for risk management. It is scrupulously hoped that some, if not all, parts of this research would be of benefit to and applied by the Islamic as well as conventional financial institutions in Pakistan and elsewhere

Mandibular Reconstruction with Free Fibula Flap: Experience at Hayatabad Medical Complex, Peshawar

Background: Mandibular defects may result from trauma, infections, cancer ablation or radiation necrosis. These defects may vary according to the content and nature of the tissues that require reconstruction. The objective of this study was to evaluate the outcome of vascularised free fibula flap for mandibular reconstruction in terms of flap success rate and complications.Material and Methods: This prospective clinical study was carried out at Department of Plastic Surgery, Hayatabad Medical Complex, Peshawar from January 2014 to December 2018. The study included patients of either gender who underwent mandibular reconstruction with free fibula oseteocutaneous flap during the study period. Diabetic patients with underlying vascular pathologies and cachectic patients were excluded from the study.Results: There were 56 patients with 38 males and 18 females. Their age ranged from 24-66 years with a mean age of 36 years. The mandibular defects resulted from various etiologies and included: Squamous cell carcinoma (n=27, 48.21%), Giant cell granuloma (n=3; 5.35%), Ameloblastoma (n=2; 3.57%), Road traffic accidents (n=10; 17.85%), Firearm injury (n=9; 16%), Bomb blast injury (n=3; 5.35%) and osteoradionecrosis (n=2; 3.57%). Primary reconstruction of the mandibular defects was performed in 44 patients, whereas delayed reconstruction was performed in 12 patients. Out of the 56 flaps, 49 flaps survived completely. Our share of complications was as follows: Wound infections (n=13; 23.21%), Skin graft loss at donor site (n=5; 8.95%), Complete flap loss (n=4; 7.14%), Orocutaneous fistulae (n=3; 5.35%), Ankle instability (n=2; 3.57%), Skin paddle necrosis (n=1; 1.78%) and sensory deficit distal to donor site (n=1; 1.78%).Conclusions: Microvascular free fibula is a reliable tool for mandibular reconstruction following tumor resection or trauma. The flap has a high success rate and relatively fewer complications

Preservation of hearing and facial nerve function with the microsurgical excision of large vestibular schwannomas: Experience with the retrosigmoid approach

Introduction: Vestibular schwannomas (VS) are the most common benign neoplasms of a cerebellopontine angle (CPA), which arise from the Schwann cells of the vestibulocochlear nerve. Eighty percent of CPA tumors are VS followed by meningioma as the second common mass lesion in this critical potential space. Treatment options range from watchful waiting with serial imaging studies to radiosurgery or a microsurgical excision or a combination of surgery and radiation therapy. The primary objective of the study was to assess hearing and facial nerve status before and after the surgery via the retrosigmoid approach.Methods: The database of Aga Khan University Hospital was searched for diagnoses of vestibular schwannomas between 2000 and 2007. A total of 35 patients were identified; among them, 27 were selected for the study who met the inclusion criteria. The variables of the study were age, gender, presenting symptoms, size of the tumor, surgical approach, hearing levels, and facial nerve function. Hearing loss was categorized according to the Gardener-Robertson hearing classification and the House-Brackmann Scale was used for facial nerve assessment.Results: Out of the 27 patients, 18 were male and nine were female. The mean age was 43 years. The most common presenting complaint was hearing loss and tinnitus, seen in 21 patients. Headache was present in six patients, ataxia in five, and vertigo in three. Facial nerve weakness was noticed in six patients. Two patients had Grade-III paralysis, three had Grade-IV paralysis, and one had Grade-V paralysis. The audiogram confirmed the presence of sensorineural hearing loss (SNHL) in all patients. Twelve patients out of 27 had Class II hearing with the threshold between 31 and 50 decibels and a Speech Discrimination Score (SDS) of 50% to 69%. Ten patients had non-serviceable hearing and the remaining five had poor hearing. The audiogram was repeated after surgery for those 12 patients who had Class II hearing and showed that seven out of 12 patients maintained a hearing threshold within the range of Class II at the one-year follow-up (hearing preservation 58%). The facial nerve preservation rate was 56% considering House-Brackmann Grade III or less as acceptable facial nerve function.Conclusion: The optimal treatment for small vestibular schwannomas is a matter of controversy; however, the choice of treatment for large vestibular schwannomas in patients without significant comorbidity is generally microsurgical excision. The surgical excision of a large VS with the retrosigmoid approach is found to be safe consistently. The hearing and facial nerve preservation in our study were found comparable with the literature

MANUFACTURING OF LIGHT-WEIGHT REFRACTORY BRICKS USING LOCAL RAW MATERIAL

Refractories with low thermal conductivity, high porosity and good mechanical strength are desirable to control the heat losses during high temperature processing. Locally produced insulating firebricks cannot be used at high temperatures due to poor refractoriness and low hot strength. In the present experimental work, locally available cheap raw materials, namely, clay, rice husk and saw dust were used to manufacture light-weight refractory bricks using different ratios of raw materials. Various process parameters were investigated and the bricks with optimized properties were produced which can be used upto 1200 °C. Moreover, the bricks produced will be lower in price and also beneficial from energy conservation point of view due to low heat losses