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Comparative Risk and Return Analysis of Islamic and Conventional Financial Institutions in Pakistan

International Journal of Islamic Economics and Finance Studies

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Title Comparative Risk and Return Analysis of Islamic and Conventional Financial Institutions in Pakistan
 
Creator Khan, Saud Ahmed
Khaleequzzaman, Muhammad
Ishfaq, Muhammad
Khan, Shahan Zeb
 
Description This paper aims to investigate whether the Islamic financial institutions perform better in terms of risk and return as compared to conventional financial institutions. To make an appropriate comparative study comprises banks, mutual funds, and Modaraba companies from 2006 to 2012. The risk and return series are oriented from stylized GARCH models and average return to risk ratio is used for potential comparison. This paper finds no difference in the performance of Islamic and conventional banks. However, large banks performed better than small banks on the basis of an average return to risk ratio. Islamic mutual funds are found riskier and provide fewer returns as compared to conventional mutual funds. Further, the performance of most Modaraba companies is found unsatisfactory. The study suggests that Islamic financial institutions need to resolve their liquidity problems, sort out new investment avenues and focus on developing short financing instruments. Islamic banks are also required to finance in risk sharing products other than fixed income.
 
Publisher www.pesar.org
 
Contributor —
 
Date 2017-03-09
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
—
 
Format application/pdf
 
Identifier http://ijisef.org/index.php/IJISEF/article/view/196
 
Source International Journal of Islamic Economics and Finance Studies; Vol 3, No 1 (2017): March/Mart 2017
Uluslararası İslam Ekonomisi ve Finansı Araştırmaları Dergisi; Vol 3, No 1 (2017): March/Mart 2017
2149-8407
2149-8393
 
Language eng
 
Relation http://ijisef.org/index.php/IJISEF/article/view/196/157
 
Rights Copyright (c) 2017 International Journal of Islamic Economics and Finance Studies
http://creativecommons.org/licenses/by-nc-sa/4.0