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Product cover image for Emaan Modaraba: Islamic Finance and the Real Economy

Emaan Modaraba: Islamic Finance and the Real Economy

Diane-Laure Arjalies; Fawad Rasool Baluch

Product #:9B21N010
Supplier:Ivey
Discipline:Finance, Sustainability
Setting:Pakistan, 2020
Details:Case (PDF) • 17 pages • 2021-08-25

Subjects:

Leadership and managing peopleFinance and investingManagement

Industries:

Financial service sector

Geography:

AsiaPakistan
Your Price:$9.71

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Emaan Modaraba, a Shariah compliant publicly traded modaraba based in Pakistan, made an investment in shares of Indus Motor Company Limited, a listed company assembling Toyota vehicles, in July 2020 – whose shares were designated to be Shariah Compliant and included in the Pakistan Stock Exchange’s KMI-All Share Islamic Index. In August 2020, Indus’ annual report disclosed that the company increased its short-term investments in interest-bearing instruments in order to be financially resilient in the wake of the COVID-19 pandemic. Ms. Khan, CEO of Emaan Modaraba, instructs Ms. Amina Ali, an investment manager, to provide her opinion on the annual report and whether Indus would remain Shariah Compliant and be included in the portfolio.

Learning Objectives

This case provides a brief introduction to the basics of Islamic Finance through the lens of a Pakistani financial institution that uses several Islamic financial arrangements. After working through the case and assignment questions, students will be able to do the following:
  • Develop familiarity with the basics of Islamic Finance arrangements and Modaraba companies.
  • Identify the complexities involved with regulating and implementing Shariah compliance.
  • Critically consider the connection between the real economy and the principles of Islamic Finance that require investors to structure their transactions revolving around the real economy.
  • Work through a real-world problem that involves adherence to the prohibition on interest and requirement for investment to be grounded in the real economy.
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Case Study: Emaan Modaraba: Islamic Finance and the Real Economy (English version) | Ivey Publishing