Islamic Capital Markets: A Comparative Approach

"This excellent textbook is based on the premise that students have to understand the workings of conventional capital markets before they can appreciate how Islamic markets differ. Such an approach makes good sense. In practice, Islamic financial instruments aim to replicate their conventional equivalents while adhering to Shari'ah. Hence it is important to know the function of the instruments and their appeal to investors as well as to governments and companies seeking to raise capital.

"The textbook is well organised with an introductory overview of how the conventional, and the much newer Islamic, capital markets developed. A chapter on interbank money markets is followed by one on the Islamic interbank money market, drawing on the Malaysian experience as its markets are the most developed. Similarly, the chapter on bonds is followed by one on sukuk, and a chapter on equities by a chapter on stock screened for Shari'ah compliance. The coverage extends to the potentially controversial topic of derivatives, with the authors demonstrating how these can also be made Shari'ah-compliant."

—Rodney Wilson Emeritus Professor, Durham University, UK and INCEIF, Malaysia

"The book's coverage of both conventional and Islamic markets, institutions, and instruments should serve very well for both academics and professionals interested in furthering their knowledge of the subject matter. It is a great and valuable resource."

—Merouane Lakehal-Ayat Professor of Finance and Fulbright Fellow Bittner School of Business, St. John Fisher College

"Islamic Capital Markets is a valuable contribution to the Islamic finance literature. This book blends the intellect of Professor Mirakhor and the years of experience of Professor Bacha, offering the reader a rich and comprehensive volume on Islamic capital markets. The book not only explains the complex concepts of Islamic capital markets in clear and lucid fashion but also provides relevant references to conventional finance, which could be attractive to students of either Islamic or conventional finance. The strength of the book lies in its rich theoretical foundation, substantiated with the current practice of Islamic capital markets. Congratulations to Professors Bacha and Mirakhor for doing a great service to the students of Islamic economics and finance."

—Zamir Iqbal Chairholder of YTI Chair of Islamic Finance, Universiti Sains Islam Malaysia, Professional Faculty, Carey Business School, Johns Hopkins University, Lead Investment Officer, The World Bank, Washington, D.C.

"Besides being a descriptive textbook, it provokes the thoughts of readers, offering a critique of the financial system of capitalism. The book covers the founding thoughts and underlying philosophy of Islamic finance. It challenges by asking the question: "Can economics explain a positive predetermined rate of interest?" While there is a tendency toward fixed income financial instruments in the Islamic financial sector, it is timely to publish a book on Islamic capital markets emphasizing risk sharing and trust as its essential element, which has an organic relationship with the contract."

—Necdet Sensoy Board Member, Central Bank of the Republic of Turkey