ISLAMIC CAPITAL MARKETS

Kabir Hassan

"The standardization of Islamic financial products is currently evolving, both for Islamic derivatives & hedging methods and for Islamic bonds (Sukuk) and the process of standardization is expected to start soon also for other Islamic instruments. Islamic capital markets, and Islamic finance in general, is experiencing global rapid growth and is currently receiving more consideration also by non-Islamic investors. Islamic Finance is based on the prohibition of interest ("Riba"), excessive uncertaintly ("Gharar") and gambling ("Maysir" or "Qimar"). From these foundations, conventional financial products, such as interest-bearing instruments, options, forwards, futures, and insurances, as well as conventional practices like short-selling and leveraging, are not compliant with Islamic law ("Shariah"). Nevertheless, the Islamic finance industry has undertaken considerable efforts to...