Islamic Financial Instruments on stock markets in GCC Essay

Islamic Financial Instruments on stock markets in GCC - Essay Example The term Sukuk is an Arabic word that is identical to the aspects of a financial instrument and is an equivalent instrument such as a bond under Islamic perspective of banking. But contrary to the usual financial instrument Sukuk is different as there are no fixed incomes as under the laws of Islam interests are seen as a crime. Therefore as an alternative it has been instrumented to use such non tangible or tangible assets that are could be classified according to the basic non tradability or tradability. But once again, under the principals of Islam these formulations could only be used in the secondary market. (Zia-ud-din, 229) According to the estimation of the 'Islamic Banking and Financial Institutions: The Progress and Probability' published in 2005, there are around $521 billion worth of financial assets that are circulating in the fiscal market as per year ending March 2005. (Asif, 337) The entire amount of this investment regulated by principals of Islamic investment plans it could be enumerated that the entire procedure is regulated by the moral and spiritual obligations of the 'Shari'ah'. Therefore it is seen that the Islamic financials instruments traded on GCC financials markets are huge and there are a number of countries who regularly uses this form of banking. The countries can be enumerated as USA, UK, Yemen, UAE, Turkey, Tunisia, Switzerland, Sudan, Sri Lanka, South Africa, Senegal, Saudi Arabia, Russia, Qatar, Palestine, Pakistan and around 150 countries all over the world. Malaysia is one of the key player of this form of banking. Dallah Al Baraka (Malaysia) Holding Sdn Bhd, Malayan Banking Berhad (Maybank), Kuala Lumpur, Islamic banking & Takaful Dept, Bank Negara Malaysia, United Malayan Banking Corp. Berhad, Kuala Lumpur, Labuan Offshore Financial Services Authority (LOFSA) and Lembaga Urusan Dan Tabung Haji (Fund), Kuala Lumpur are the few most important financial institutions of the country. (Syyed, 98) The financial institutions that that deal with the instruments can be enumerated as International Islamic Financial Markets, Mudaraba Companies, Takaful Companies (These are basically insurance companies), Islamic Mortgage Companies, Islamic Windows, Islamic Investment Funds and Banks and Islamic Banks. Under these institutions there are different plans such as Mudaraba which are basically Capital trust financing where the basic implementation is the contact which accumulates the capital along with the cost. However there are also other schemes that are marked up. Then there are also other plans under which leasing comes into consideration. This called Ijara. There is also another technique that is defined Ijara wa Iktin wa which is basically the contract of hire purchase. (Iqbal, 33) The basic limitations of these plans are based on the contracts between the parties but the over all scenarios are based on the principals of Islam where a financial instrument like Musharaka is treated as long termed investment under the parameters of equity arrangement. The capital supplied in this case is the bank and the clients. The profit in this case is shared among the concerned parties in according to prior agreement whereas the loss is shared in accordance to the capital invested. On the other hand another financial instrum

Business Synoptic 1 Essay Example | Topics and Well Written Essays - 4750 words

Business Synoptic 1 - Essay Example This has been described in detail in the diagram elucidating a close linkage between the concepts. The diagram below helps to understand the linkage between the strategic management and the management accounting. Evidence Link between Strategic management and Management Accounting Accounting plays a vital role in the calculation of the product and to measure the profitability of the customers. In the figure above, it can be seen that the supply chain management of the company which is a strategic management concept can be linked to the customer focused accounting which on the other hand is a management accounting concept. The link between the two concepts is evident in the form of increased sales, profitability and productivity. The strategic decision making process incorporates a customer focus in order to guide value creation and delivery decisions. It is useless to supply the goods and services if the organisation is not able to create value in the minds of the customers. The mana gement accounting techniques involve efficiency measures and control which help the organisation to analyse the performance of the suppliers and the abilities of the company. It is worth noticing that the supply chain management consists of each of the link in the whole supply chain, starting from the producer to the consumers. In case of horizontal organisation, the use of various management accounting techniques such as target costing, life cycle costing, consumer focused accounting, theory of constraints, balance scorecard and activity based cost management techniques are evident. The overall activity of the supply chain can be aligned with the wants and needs of the customers in order to satisfy both the organisations as well as the customers. If the company’s supply chain is customer focused then the company as a whole will be benefited. Based upon Nestle’s case study, a connection can be formed between the strategic management and the management accounting that e lucidates the firm’s approach in its highly successful growth strategy. It has been argued by the researcher that the organisation that implements the strategic management approaches tend to be at a successful and profitable state. The business that uses the strategic management approaches shows progress in sales, profitability as well as productivity in comparison to the firms which lacked systematic planning activities (Virtual University of Pakistan, n.d.) There are various elements that are involved in Nestle’s competitive strategic management approach. They are ‘situation analysis, the strategy formulation, implementation and evaluation’. The competitive strategy of Nestle is associated with foreign direct investment in both the businesses namely the dairy and food businesses. It has been believed by the company that strengthening their leadership in this market is the most important element of their corporate strategy (Castelarhost,