COURSE DESCRIPTION
This advanced course provides a comprehensive and critical examination of the structure, instruments, and regulatory framework of Islamic capital markets. Students will explore the theoretical foundations and practical applications of Shariah‑compliant equities, investment funds, Sukuk (Islamic bonds), derivatives, and hedging mechanisms. The course analyzes the development of Islamic capital markets in leading jurisdictions such as Malaysia, the GCC, and beyond, with a focus on product structuring, risk management, market liquidity, and Shariah compliance issues. Drawing on real‑world case studies and contemporary market developments, the course integrates financial theory with Islamic legal principles to prepare students for advanced roles in Islamic finance, investment management, and capital market regulation.
COURSE TEACHING OBJECTIVES
- Critically analyze the structure, functions, and regulatory framework of Islamic capital markets and distinguish them from conventional capital markets.
- Evaluate the mechanics, applications, and Shariah requirements of key Islamic capital market instruments, including equities, Sukuk, and Islamic funds.
- Assess the role of Sukuk in project finance, liquidity management, and sovereign and corporate financing, and differentiate between various Sukuk structures.
- Critically examine portfolio management, Shariah screening methodologies, indexing, and risk management in Islamic capital markets.
- Synthesize knowledge of Islamic capital market instruments and principles to analyze contemporary challenges such as market liquidity, pricing, and innovation.
COURSE STUDENT LEARNING OUTCOMES
Upon successful completion of this course, students will be able to:
- Explain the foundational principles and key differences between Islamic and conventional capital markets.
- Identify and describe the major types of Shariah‑compliant capital market instruments, including equities, Sukuk, and Islamic funds.
- Analyze the structure and operational mechanism of a Sukuk issuance, including the role of the SPV and the rights of certificate holders.
- Apply Shariah screening methodologies to evaluate the compliance of equity portfolios.
- Critically evaluate the challenges facing Islamic capital market development, including liquidity, pricing, and standardization.
ORGANIZATION OF COURSE STUDIES
The course is organized into five study periods (approx. 2 weeks each, though self‑paced). Each period includes intensive reading of the assigned textbook, viewing of the supplementary video, and a short response paper or ethical analysis (500–1,000 words) reflecting on the material and its application. Students must contact the instructor for feedback after each period.