Islamic Finance in the Global Economy, by Ibrahim Warde. Edinburgh, Scotland: Edinburgh University Press, 2000. 252 pages. Notes. Gloss. Index. $90. Reviewed by Clement M. Henry Ibrahim Warde has written a forthright and scholarly survey of a subject that deserves the attention of both international bankers and area specialists who are interested in Islamic culture or political economy. Islamic Finance in the Global Economy documents the evolution of Islamic banking over the past quarter of a century, from the go-go era of abundant oil revenues that readily supported a new commercial adventure to the current decade of accelerated globalization, especially of financial institutions. It offers a much-needed introduction to a highly complex set of economic, cultural, and political phenomena. Dr. Warde's definition of Islamic financial institutions is that they be "based, in their objectives and operations, on Koranic principles." Typically they will have a religious board that decides what is properly Islamic, although Warde notes that there are exceptions and that "no definition.. is entirely satisfactory" (p. 5). Throughout his survey, the author is at pains to emphasize that Islam admits of many interpretations, that Islamic banking should not be confounded with Islamist politics, and that political Islamism comes in many shapes and forms. He cites Aziz al-Azme's "Islams" approvingly (p. 17) but, perhaps for the benefit of his banker readers, devotes more space than they deserve to criticizing journalists like Steven Emerson who conjure up pictures of terrorism and money-laundering (pp. 218, 222). Warde himself has an excellent command of the serious literature on political Islam, including scholars like Olivier Carre, who should be better known in the United States. References to Richard Bulliet and Ernest Gellner might have further enriched his discussion of contemporary Islamism and its possible convergence with economic liberalism. After an initial take-off in the late 1970s and early 1980s, Islamic banks stagnated. Declines in oil revenues, coupled with a financial crisis in Kuwait, put many of these new banks at risk. Unlike the anti-Islamic propaganda of the popular press or the equally uninformative apologetics written by dedicated Islamists, Warde frankly discusses issues of Islamic "moral hazard" and financial mismanagement that have plagued a number of these institutions. Host governments have been obliged to bail out a number of them, including the Kuwait Finance House in 1984, the largest Islamic bank at the time, and, in 1998, the most venerable of them, Dubai Islamic Bank, which was founded in 1974. Despite their growing pains and although oil revenues stagnated until quite recently, after this book went to press, Islamic financial institutions got a second wind (or "aggiornamento" as the author calls it) with the intensified pressures on the region to integrate into the global economy. As times became more difficult, with the poorer, heavily indebted countries in the region obliged to engage in financial structural adjustment, Islamic financial institutions paradoxically took off once more. Warde highlights the congruence between the new international financial environment and these culturally specific banks. …

Islamic Finance in the Global Economy

This paper examine empirically the relation between trades and quote changes for stocks trades in order-driven marketEstimates for samples of Shanghai Stock Exchange and Shenzhen Stock Exchange issues suggest:the price impact of trades is positive and persistent,this means the information content of trades is substantial;Large trades convey more information than small trades;Information asymmetries are more significant for small firms

Measuring the Information Content of Stock Trades

It is clear that analogy cannot work effectively without recourse to an effective method of storing patterns. However, I suggest that an even stronger statement holds: the nature of analogy actually dictates a particular type of memory structure. The only way analogy can work effectively is if it is coupled with a memory that is specifically structured so as to support analogical reasoning.

Long-Term Memory

The following exercise provides a review of basic concepts used in statistical characterization and comparison of data including the concepts of probability, population parameters and correlation coefficients. The exercise makes use of data obtained from aerial photographs. The photographs were taken using new hyperspectral imaging technology. The specific type of hyperspectral imagery used in this study is referred to as AVIRIS. AVIRIS stands for airborne visual and infrared imaging spectroscopy. The range of wavelengths scanned by the AVIRIS spectroscope extends from about 0.37 microns to 2.507 microns (see below). This corresponds roughly to the visible and near or reflected infrared part of the electromagnetic spectrum (below). Each pixel in an AVIRIS scene contains information recorded at 224 separate wavelengths extending over the 0.37 to 2.507 micron range. The mean wavelength difference between samples is approximately 10 nanometers or 1/100 of a micron.

Quantitative Methods I

Seasonal and size anomalies in the Japanese stock market

The influence of the moon on human behavior have been featured in many, not only scientific publications. This paper tests the hypothesis that the one-session rates of return of index WIG (Warsaw Stock Exchange) in the period of 16.04.1991-31.03.2015, calculated for each of the following phases: full moon, new moon, first and third quarter, are statistically different form zero (at the significance level of 95%). Calculations presented in this paper indicate that the one-session average rates of return for the sessions when the moon was in new phase, are statistically different from zero. In turn, the one-session average rates of return computed for each day of the week, when the moon was in one of analyzed phases (full, new, first and third quarter) did not differentiate from zero. However calculations of one-session average rates of return, regarding moon phases falling in a specific month displayed that they are statistically different from zero regarding: full moon sessions in February and June, the first quarter sessions in February and November, as well as the third quarter sessions in October.

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Moon Phases and Rates of Return of WIG Index on the Warsaw Stock Exchange

Moon Phases and Rates of Return of Wig Index on the Warsaw Stock Exchange

The commodity market has been becoming one of the main popular segments of the financial markets among individual and institutional investors in recent years. Likely to the equity market, the problem of anomalies in the commodities market is becoming an interesting phenomenon, especially in the segment of the precious metal. This paper tests the hypothesis of monthly, the day-of-the week and weekend effects of the precious metal markets quoted on the London Metal Exchange for gold, silver, platinum and copper in the period of 01.01.1994-31.12.2014 considering also palladium in the period 01.01.1997-31.12.2014. Calculations presented in this paper indicate the absence of the monthly effect on gold, silver, platinum, copper markets but proved occurrence of monthly anomaly in the month of September on palladium market. In the analyzed period day-of-the week effect for any of the studied metal markets was not observed but the weekend effect was registered on the gold and copper markets.

https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID2600008_code2165668.pdf?abstractid=2598514&mirid=1&type=2

Analysis of Selected Seasonality Effects in the Following Metal Markets: Gold, Silver, Platinum, Palladium and Copper

Aim/purpose – The primary aim of the paper is to verify the hypothesis on the normal distributions of 65 stock index returns, while the secondary aims are to examine normal distributions for specific years (for six indexes) and for bull and bear markets (for DJIA), demonstrate that the distribution of rates of return for individual indexes can be normal in short time intervals, and then rank analyzed indexes according to the proximity of the distribution of their rates of return to the normal distribution. Design/methodology/approach – The research sample consists of the value of 65 stock indexes from various time intervals. The sample includes both developed markets and emerging markets. The following rates of return were tested for the normality of the rate of return distribution: close-close, open-open, open-close and overnight, which were calculated for daily, weekly, monthly, quarterly and yearly data. Statistical tests of different properties and forces were used: Jarque–Bera (JB), Lilliefors (L), Cramer von Mises (CVM), Watson (W), Anderson–Darling (AD). In the case of six indexes of developed markets (DJIA, SP500, DAX, CAC40, FTSE250 and NIKKEI225), normality tests of rates distribution were calculated for individual years 2013-2016 (daily data). In case of the DJIA index, the normality tests of the distribution of returns for individual bull and bear markets were analyzed (daily data, rates of return close-close). In the last part of the paper the analyzed indexes were ranked due to the convergence of their return to normal distribution with the use of the following tests: Jarque–Bera, Shapiro–Wilk and D’Agostino-Pearson. Findings – The distribution of daily and weekly returns of equity indexes is not a normal distribution for all analyzed rates of return. For quarterly and annual data compression the smallest number when there were no reasons to reject the null hypothesis was observed for overnight returns compared to close-close, open-close and open-open returns. For the daily, weekly and monthly overnight rates of return, the null hypothesis was Krzysztof Borowski 6 rejected for all analyzed indexes. The following general conclusion can be formulated: the higher the data compression (from daily to yearly), the fewer rejections of H0 hypothesis. The distribution of daily returns can be normal only in given (rather short) time intervals, e.g., particular years or up or down waves (bull and bear markets). The position of the index in the ranking is not dependent on the date of its first publication, and hence on the number of rates of return possible to calculate for analyzed index, but only on the distribution of its rates of return. Research implications/limitations – The main limitations of the obtained results are different time horizons of each of the analyzed indexes (from the first date in a data base until 30.06.2017). The major part of the returns of the analyzed indexes differs from the normal distribution, which question the possibility of unreflective implementation in practice of economic such models as CAPM and its derivatives, Black–Scholes options valuation, portfolio theory and efficient market hypothesis, especially in long time horizons. Contribution/value/contribution – The contribution of this paper is verification of the statistical hypothesis regarding normal distribution of rates of return: (1) other than close-close, i.e. open-open, open-close and overnight with the use of various statistical tests, various data compression (daily, weekly, monthly, quarterly, yearly) for 65 indexes, (2) for six stock exchange indexes in each of the years from the period of 20132016 (daily data) and (3) for individual up and down waves for the DJIA index (daily data). In addition, other papers focused only on one or two statistical tests, while five different tests were implemented in this paper. This paper is the first to create a ranking of stock market indexes due to the normal distribution.

Testing 65 equity indexes for normal distribution of returns

The aim of the paper is to find optimal exponential moving averages for the main technical analysis oscillator MACD (Moving Average Convergence Divergence) which trigger buy and sell signals for companies from the WIG20 index, the mWIG40 and the sWIG80 index, listed on the Warsaw Stock Exchange. The analysis was conducted on the basis of data collected from 17 November 2000 to 31 December 2018, i.e. from the day when the WARSET system was introduced. The optimization was done with the method based on rates of return because they influence the final investment result. It is the first research of this kind on the Polish financial market. It shows that each of the examined companies has its own lengths of moving averages which optimize rates of return, however, for some enterprises these values may be the same. Many research papers on technical analysis apply standard lengths for averages used in MACD. The authors of the present paper find out that investors should not follow them automatically, but rather look for optimal values for each market and each company. Such an opinion stands in sync with research literature which proves a varying efficiency of technical analysis tools, depending on the market development level, its transaction volume or its liquidity.

Krzysztof Borowski

Papers

Moon Phases and Rates of Return of WIG Index on the Warsaw Stock Exchange

Moon Phases and Rates of Return of Wig Index on the Warsaw Stock Exchange

Analysis of Selected Seasonality Effects in the Following Metal Markets: Gold, Silver, Platinum, Palladium and Copper

Testing 65 equity indexes for normal distribution of returns

Optimal Lengths of Moving Averages for the MACD Oscillator for Companies Listed on the Warsaw Stock Exchange