Part III Beyond the Transatlantic Corridor, 10 The Paradoxes of Islamic Capital Markets

2021 ◽  
Author(s):  
Jordan Cally
Keyword(s):  
Initial Public Offering ◽  
Capital Markets ◽  
International Institutions ◽  
International Markets ◽  
Islamic Finance ◽  
International Capital ◽  
Gulf Region ◽  
International Capital Markets ◽  
Saudi Aramco ◽  
Public Offering

This chapter describes Islamic capital markets. Led by Malaysia and its distinct Islamic Market, Bursa Malaysia-I, Islamic finance has entered the mainstream of international capital markets, primarily in the form of ‘Islamic bonds’ (sukuk) and fund products. Saudi Arabia, with its well-publicized Saudi Aramco initial public offering (IPO) in 2019, raised, less successfully, a different flag in the international markets. Islamic finance has infiltrated conventional markets too. Non-Islamic issuers, sovereigns, corporates and international institutions, have issued sukuk, attracted by the wash of liquidity and investors in the Gulf region. Indeed, Islamic finance has been rubbing shoulders with modern conventional finance for several decades now. As ‘conventional’ finance has become less ‘conventional’, shari'a compliant finance has become more accepted. Impediments to growth persist; the imperviousness to standardization and the artificiality of the structures underlying the financial products increase costs and possibly risk, making the products uncompetitive. However, cost is not the only consideration in the marketplace. With greater interest in ethical and ESG (environmental, social, and governance) investing, Islamic finance may be the path or the way to future markets.

Part I International Capital Markets in Context, 2 Making International Markets Work—Regulatory Techniques

2021 ◽  
Author(s):  
Jordan Cally
Keyword(s):  
Capital Markets ◽  
International Markets ◽  
Nation State ◽  
International Capital ◽  
National Authority ◽  
National State ◽  
International Capital Markets ◽  
National Initiatives

This chapter discusses the regulatory techniques in the international capital markets. Regulation, as it is usually understood, emanates from a national (or perhaps sub-national) authority and operates locally. Capital markets predate the nation state and have been boundary blind. So, how have modern international capital markets been regulated? Different approaches have waxed and waned in popularity, but several broad groupings can be discerned: inaction; unilateralism; formal and informal cooperative efforts; and international or supra-national initiatives. The different regulatory approaches operating in modern international capital markets are not mutually exclusive; they often coexist or interact, in both a positive and negative manner. Ultimately, the different regulatory approaches to international capital markets, which ones dominate, which ones wither away, have been shaped by the geopolitical forces of empire, the emergence of the supra-national state, and hegemony.

Chinas International Financing Strategies

2011 ◽  
Vol 1 (3) ◽  
Author(s):  
Paul Sheldon Foote ◽  
June Zhu
Keyword(s):  
Initial Public Offering ◽  
Capital Markets ◽  
International Investment ◽  
Lessons Learned ◽  
International Capital ◽  
International Capital Markets ◽  
Foreign Companies ◽  
Regulatory Policies ◽  
Chinese Companies ◽  
International Financing

In order to finance rapid economic growth in the 1990’s, Chinese companies tried different strategies for raising capital in international capital markets.  The strategies ranged from the use of depository receipts to listings on major stock exchanges.  The lessons learned from the experiences of the Chinese companies could be valuable for managers from many other countries seeking to raise capital in international capital markets and to investors seeking some foreign investments for their portfolios.  In addition, there are many implications for researchers in international business and economics fields, such as: regulatory policies regarding overseas listings (registration procedures, foreign exchange control), initial public offering (IPO) processes for foreign companies, investment returns with and without international financing, efforts to narrow the differences between accounting standards, international investment banking and accounting services, and World Trade Organization (WTO) changes.  While Chinese companies have been active in many capital markets, the focus of this study is upon the activities of Chinese companies in American capital markets.

Part II The Transatlantic Dialogue, 5 Cultivating the US Overseas Market

2021 ◽  
Author(s):  
Jordan Cally
Keyword(s):  
United States ◽  
Capital Markets ◽  
Turning Point ◽  
The United States ◽  
International Markets ◽  
Securities And Exchange Commission ◽  
International Capital ◽  
International Capital Markets ◽  
The Third ◽  
The Us

This chapter details how the United States introduced a trio of regulatory initiatives which represented a turning point in international capital markets. The growing significance of international markets could no longer be ignored nor left to the regulatory hinterlands. The first two initiatives, Regulation S and Rule 144A (under the US 1933 Act), have become standard features of virtually all international capital raisings. Although very different in conception and operation, they are fraternal twins, both responses to a 1987 United States Securities and Exchange Commission (SEC) report on internationalization. They were considered and adopted by the SEC on the same day in April of 1990. The third initiative, the creation of a Multijurisdictional Disclosure System (MJDS) between Canada and the United States, is a younger sibling, conceived in the same flurry of interest in international markets, but making its appearance a year later.

Part IV Market Institutions And International Capital Markets, 13 Conclusion

2021 ◽  
Author(s):  
Jordan Cally
Keyword(s):  
Capital Markets ◽  
International Markets ◽  
Asian Financial Crisis ◽  
Real Economy ◽  
International Capital ◽  
Market Institutions ◽  
International Capital Markets ◽  
The Real ◽  
Trading Patterns ◽  
Regulatory Landscape

This concluding chapter discusses how capital markets are changing, dramatically so. The massive innovation in investment products over the last 30 years is giving way to shifting trading patterns, changing investor profiles, and new forms of capitalism and finance. The dynamics of international markets have changed, even since the Asian financial crisis, when ‘contagion’ entered the financial lexicon. Now, information, investments, and capital can be transmitted instantaneously; so can risk. Indeed, the new markets defy the old rules. Technology pervades everything, giving rise to a new catchphrase, ‘fintech’. As financial markets have become inexorably interconnected, at the same time they appear increasingly disconnected from the real world, the real economy. The chapter then looks at the topography of the new regulatory landscape. The big economies, and their regulatory approaches, will continue to impact strongly international markets. But there are more and more big economies with resurgent capital markets, so the international dynamics will change.

Where are Islamic finance indices pointing towards?

2019 ◽  
Vol 28 (2) ◽  
pp. 267-281
Author(s):  
Mohammed El Hadi El Maknouzi ◽  
Iyad Mohammad Jadalhaq
Keyword(s):  
Capital Markets ◽  
Stock Markets ◽  
Islamic Finance ◽  
International Capital ◽  
Financial Flows ◽  
Content Type ◽  
International Capital Markets ◽  
Ex Post ◽  
Financial Transactions ◽  
Financial Indices

Purpose This paper aims to survey the screening practices and regulatory arrangements that can be gleaned from the experience of Islamic financial indices on international stock markets. Such indices can be regarded as experiments in the demarcation of “pockets” of Sharī‘ah-compliant securities exchange, in the context of non-Sharī‘ah-compliant stock markets. They offer valuable regulatory precedent, with a view to the development of a transnational domain of Islamic financial transactions. Design/methodology/approach The paper leverages the experience of Islamic financial indices for charting the fault lines between the foundational principles of Islamic finance, and those of interest-based investment commonly accepted on international financial markets. It subsequently reviews the most salient regulatory arrangements in place for discriminating between permissible and forbidden securities and modes of trading, as implemented on Islamic financial indices. These include selection criteria for index inclusion, and Sharī‘ah committees with ex ante and ex post supervisory duties. Findings The paper makes a case for viewing Islamic finance indices on international capital markets as capacity-building experiments for the regulation of transnational Islamic financial flows. Originality/value The study rejuvenates the pragmatic approach towards the development of Islamic capital markets, by suggesting that incremental organisational innovations, as developed in connection with Islamic financial indices, can build institutional capacity towards an economy that abides by Islamic values.

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