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The role of the stock market in the provision of Islamic development finance: Evidence from Sudan

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  • Hearn, Bruce
  • Piesse, Jenifer
  • Strange, Roger

Abstract

This paper assesses the impact of stock exchange funding in the Shari'ya compliant Islamic economy of Sudan. Evidence suggests that while Islamic financial instruments have considerable potential in facilitating development finance through their emphasis on partnership this is better achieved by the banking system rather than the Khartoum Stock Exchange. A case study of the Sudan Telecommunications company shows that larger firms able to cross-list elsewhere are likely to choose regional markets in preference to their domestic one thus benefiting from lower costs of equity. However, governance preferences are likely to favour block shareholders following the Islamic finance partnership concept.

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  • Hearn, Bruce & Piesse, Jenifer & Strange, Roger, 2011. "The role of the stock market in the provision of Islamic development finance: Evidence from Sudan," Emerging Markets Review, Elsevier, vol. 12(4), pages 338-353.
    • Handle: RePEc:eee:ememar:v:12:y:2011:i:4:p:338-353
    DOI: 10.1016/j.ememar.2011.04.004
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    2. Sharma, Susan Sunila & Narayan, Paresh Kumar & Thuraisamy, Kannan & Laila, Nisful, 2019. "Is Indonesia's stock market different when it comes to predictability?," Emerging Markets Review, Elsevier, vol. 40(C), pages 1-1.
    3. Juhro, Solikin M. & Narayan, Paresh Kumar & Iyke, Bernard Njindan & Trisnanto, Budi, 2020. "Is there a role for Islamic finance and R&D in endogenous growth models in the case of Indonesia?," Pacific-Basin Finance Journal, Elsevier, vol. 62(C).
    4. Scott J. Niblock & Panha Heng & Keith Sloan, 2014. "Regional stock markets and the economic development of Southeast Asia," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 28(1), pages 47-59, May.
    5. Asongu Simplice, 2011. "Government Quality Determinants of Stock Market Performance in African Countries," Working Papers of the African Governance and Development Institute. 11/019, African Governance and Development Institute..
    6. Ajili, Wissem & Gara, Zeineb Ben, 2013. "Quel Avenir Pour La Finance Islamique En Tunisie ?," Etudes en Economie Islamique, The Islamic Research and Training Institute (IRTI), vol. 7, pages 31-70.
    7. Asongu Simplice, 2012. "How has Mobile Banking Stimulated Financial Development in Africa?," Working Papers of the African Governance and Development Institute. 12/027, African Governance and Development Institute..
    8. Asongu, Simplice, 2015. "Financial development in Africa - a critical examination," MPRA Paper 82131, University Library of Munich, Germany.
    9. Mohammad Al-Suhaibani & Nader Naifar, 2014. "Islamic Corporate Governance: Risk-Sharing and Islamic Preferred Shares," Journal of Business Ethics, Springer, vol. 124(4), pages 623-632, November.
    10. Asongu Simplice, 2011. "Democracy and Stock Market Performance in African Countries," Working Papers of the African Governance and Development Institute. 11/021, African Governance and Development Institute..
    11. Boubakri, Narjess & Chen, Ruiyuan & Guedhami, Omrane & Li, Xinming, 2019. "The Stock Liquidity of Banks: A Comparison between Islamic and Conventional Banks in Emerging Economies," Emerging Markets Review, Elsevier, vol. 39(C), pages 210-224.
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    13. Iyke, Bernard Njindan & Maheepala, M.M.J.D., 2022. "Conventional monetary policy, COVID-19, and stock markets in emerging economies," Pacific-Basin Finance Journal, Elsevier, vol. 76(C).

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    More about this item

    Keywords

    Sudan; Islamic finance; Emerging financial markets;
    All these keywords.

    JEL classification:

    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • P45 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - International Linkages

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