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Impact of Liquidity Rules on Shareholders’ Returns in Jordan Islamic Bank

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  • Abdullah Ibrahim Nazal
  • Fuad Al-Fasfus

Abstract

This paper aims to explore the impact of liquidity increases by local and international roles on shareholders’ returns in the Jordan Islamic Bank as case study. The study methodology based on financial tables annual reports of the bank from (2009-2016) in order to analysis asset liquidity risk standard and its affection on managing balance sheet, and analysis returns for common shareholders in the Bank also discuss the result of shares return reducing. The real impact is deferent because the market price of the Jordan Islamic Bank shares is not affected negatively by the rule. Its price in the market is more than the share value by the ratio (all equities/ all shares). The percentage between the market price and ratio was equal to 202% in 2014 and reduced to 155% in 2016. By discussion, the ratio there is a gap of equities impact as a result of applying depreciation on fixed assets yearly, regardless of its growth by market price. Fair result is to increase equities based on fixed assets market price increasing. This paper contributed to the knowledge by different ways, it helps leaders and managers to find the real impact of managing liquidity risk in the Islamic Bank by the Central Bank and Basel Committee.

Suggested Citation

  • Abdullah Ibrahim Nazal & Fuad Al-Fasfus, 2018. "Impact of Liquidity Rules on Shareholders’ Returns in Jordan Islamic Bank," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(6), pages 225-225, April.
    • Handle: RePEc:ibn:ijbmjn:v:13:y:2018:i:6:p:225
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    References listed on IDEAS

    as
    1. Shaikh, Salman Ahmed, 2011. "A critical analysis of Mudarabah & a new approach to equity financing in Islamic finance," MPRA Paper 19697, University Library of Munich, Germany.
    2. Muhammad Abdurrahman Sadique, 2009. "Profit and Loss Allocation among Islamic Bank and Client Partner in Equity Financing: Practice, Precepts and Alternatives توزيع الأرباح والخسائر بين المصارف الإسلامية وعملاء تمويل المشاركة: المنطق وال," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 22(1), pages 145-168, January.
    3. Zubair Hasan, 2010. "Islamic Banks: Profit Sharing Equity and Credit Control البنوك الإسلامية: ربحية التمويل القائم على الشراكة ومراقبة الائتمان," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 23(1), pages 131-147, January.
    4. WenShwo Fang & YiHao Lai & Stephen M. Miller, 2006. "Export Promotion through Exchange Rate Changes: Exchange Rate Depreciation or Stabilization," Southern Economic Journal, John Wiley & Sons, vol. 72(3), pages 611-626, January.
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    Cited by:

    1. Kirui Kipngetich Vincent & Dr. Onchangwa Gilbert, PhD, 2023. "An Assessment of Liquidity and Shareholders’ Earnings of Listed Firms at The Nairobi Securities Exchange, Kenya," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 7(5), pages 1341-1348, May.

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    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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