Abstract
Welcome to the special issue of Islamic finance cases. This is our second special issue, and I hope that these cases will find their way to your classrooms. We have an impressive line-up of cases for you to teach.
In the first case of the issue, ‘Contract Comprehension: Prudent Takaful Claim Decision’, the authors, R. Yakob, H. Redzuan, H. Janor and B. A. M. Hafizuddin-Syah, present the challenges of understanding the coverage, concepts and provisions of takaful contract in making a claim decision. This case is ideal for students studying risk management, insurance and takaful. The case would also provide exposure in analysing family takaful contracts and subsequently preparing students to handle real-life situations relating to takaful claims. I enjoyed reading this case and I hope that you will also enjoy teaching it.
F. Ahmed, F. J. Seyyed and H. Ashfaq examine the performance and challenges faced by the Meezan Capital Protected Fund (MCPF) ensuing from the global financial crisis of 2008 in the case ‘Managing a Shariah-compliant Capital Protected Fund Through Turbulent Times’. The case is designed to expose students to the structuring of principal-protected products using the Shariah-compliant instruments—funds and notes targeted at investors with low-risk tolerance. The case provides students an opportunity to simulate equity returns and evaluate the efficacy of alternative asset allocation strategies to maximize risk-adjusted returns. An extremely useful case for your courses on investments and portfolio management, fixed income securities, financial derivatives and mathematics of finance.
In 2017, Dana Gas called for a restructuring of the Sukuk maturing in October, worth $700 million. This demand was based upon the claim that the Sukuk in its present form was Shariah non-compliant and hence, unlawful and unenforceable under UAE law. In the case ‘Dana Gas: The Sukuk Dispute’, authors, O. Haroon, S. F. Meenai and A. R. Rizvi, analyse the impact of the events leading up to this decision on the work of financial analysts following such firms and products. This case can be very effectively used in Islamic finance and banking courses at the undergraduate and graduate levels. I would be interested in using this case in an ethics course as well.
‘Waseela Foundation: Accounting for Zakat’ is a thought-provoking accounting case in which the authors, J. Ashraf and A. Rauf, focus on the issues faced by the Waseela Foundation, a nonprofit, in its accounting system, specifically in recording the receipt of zakat donations and its utilization thereof. Their existing system puts all types of donations into one pool. Expenses are also paid out of that same pool. This is not acceptable to some zakat donors who have different interpretations regarding the use of zakat funds. Zakat poses special accounting challenges because there are variations in interpretations of different schools of thought about avenues of spending the zakat. The case, thus, provides students with an excellent opportunity to understand the intricacies of fund accounting for non-profits.
In the last case of this special issue, authors, F. J. Seyyed, T. Shehzad and H. Ashfaq, introduce us to Manal Iqbal, a fund manager of Pakistan Islamic Pension Fund (PIPF) at MCB Arif Habib Savings and Investment Limited (MCBAH). Manal was asked by the chief investment officer (CIO) of the company to evaluate Millat Tractors Limited (MTL) as a potential investment for PIPF to gain exposure to the agricultural sector of Pakistan and report her findings to the investment committee. We meet Manal as she is reflecting on the strategic positions of her pension fund for the investment committee meeting. The case provides students with an opportunity to understand and gain practice in the valuation of an emerging market listed company. This case can be effectively used in investment and corporate finance courses at the undergraduate and graduate levels as well as in executive programmes.
We appreciate the input and feedback from our reviewers and contributors. We are obliged to our readership for their continued support and encouragement—a reminder that you may contact the authors directly for the teaching notes to the cases published in the journal.
I hope that you enjoy teaching and reading this special issue.