CONFIDENTIAL

BM/APR 2009/ISB656

UNIVERSITI TEKNOLOGI MARA FINAL EXAMINATION

COURSE COURSE CODE EXAMINATION TIME .

ISLAMIC CAPITAL MARKET ISB656 APRIL 2009 3 HOURS

INSTRUCTIONS TO CANDIDATES 1. 2. 3. This question paper consists of six (6) questions. Answer only four (4) questions in the Answer Booklet. Start each answer on a new page. Do not bring any material into the examination room unless permission is given by the invigilator. Please check to make sure that this examination pack consists of: i) ii) the Question Paper an Answer Booklet - provided by the Faculty

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 3 printed pages
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BM/APR 2009/ISB656

QUESTION 1 a) Innovation process in developing Islamic financial instruments is crucial in satisfying the increasing needs of the market. However the process is still restricted against certain aspects and rules. Explain the three (3) aspects that need to be considered in Islamic financial engineering. (18 marks) b) Briefly explain the concept and mechanism of Cagamas Mudharabah Bond. (7 marks) QUESTION 2 a) b) c) Discuss the differences between Islamic bonds and conventional bonds. (8 marks) Briefly explain the principles used for the issuance of Islamic bonds. (10 marks) Islamic Private Debt Securities (IPDS) has been introduced since 1990 by using different types of Shariah concept. Explain the IPDS structure using Bay Bithaman Ajil (BBA) contract. (7 marks) QUESTION 3 a) b) Discuss the arguments that support the permissibility of asset securitization. (15 marks) What is an Islamic Unit Trust? (10 marks) QUESTION 4 In January 2007, Hakim bought RM50,000 securities of ABC Company. However, in April 2008, the ABC securities were announced as a "non-approved" by the Shariah Advisory Council (SAC). a) Discuss the different ways Hakim should handle this issue. (20 marks) b) List down five (5) Shariah criterions for approved securities under Securities Commission (SC). (5 marks)

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CONFIDENTIAL QUESTION 5 a)

BM/APR 2009/ISB656

When a company issues any securities or certificates to investors, sometimes investors need to trade them in the secondary market. This trading is referred as Bay al-Dayn. Define Bay al-Dayn and explain the Shariah rules regarding the transaction. (18 marks)

b)

Describe the FTSE Bursa Malaysia Emas Shariah Index and FTSE Bursa Malaysia Hijrah Shariah Index. (7 marks)

QUESTION 6 A comprehensive 10-year plan charting the strategic positioning and future direction of the Malaysian capital market has been established on 1993. Discuss five (5) objectives stated in this Capital Market Masterplan. (25 marks)

END OF QUESTION PAPER

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