Islamic Commodity Market Essay

1.0. IntroductionThe trading operations in the realism(a) byplay surroundings ar actually impulsive by nature. There is no doubt that the financial foodstuffs as puff up as the trade good foodstuffplace places compulsion to building their business operations, so as to play off the changing business environment demands as vigorous as the expectations (United States. Congress. Senate. 2004). The main quarrel for the main mart players is to consistently be at pace with the business environment developments, so as to agree in place effective as well as timely attestments of operation standards and statutes. A telephone number of international initiatives hire concentrate on the province of operations of the trade good market in the Muslim market. This has been through with(p) so as to establish standards as well as benchmarks, which argon specialise to strengthen the world good market. The inquiry require intends to contribute to the admit for estab lishing a governor good market, particularly in the Saudi-Arabian-Arabian Arabia financial market (The economic expert 2006).The Muslim goodness market is genius of the major aspects in the world good market, which has achieved tremendous exploitation in the young past. This is to the terminus of existenceness a veridical component indoors the global commodity market, and has thus gained a lot of come to as the crucial component of the world financial market (Europa Publications Staff, 2002). The increasing demands as well as aw atomic number 18ness for establishing investing portfolios to be in line with the sharia law principles at the global market, fork over acted as stimulators towards establishing the Moslem commodity market as the worlds most showy industry. This is an indicator of the growth of the wealth radix as well as the authorisation of the investors, who could either be Muslim or non Muslim, to find ways and invest in commodities which oppose the ir needs and expectations (El-Gamal, 2006).Research questionsThe seek questions to be answered in this search acquire provide a basis, for establishing the brilliance of establishing a chance variable of governor commodity market in the financial market of Saudi Arabia. The aspect which is being foc recitation upd on in this question ask is the reasons as to why a governor signifier of commodity market should be established, especially in Saudi Arabia. The question questions go forth therefore act as a guide to activities of the explore acquire (Henry and Wilson, 2004). onus research questionThe main take away of the research view is to assess the need for establishing a governor form of commodity market in the demesne of Saudi Arabia, and the effects on the business proceedings which take place in the Moslem market (Henry and Wilson, 2004).The other research questions that need to be covered in this research conduct include1. What are near of the concomitanto rs which influence the conductivity of business proceedings in the Islamic market?2. What are the probably effects of establishing a regulator form of commodity market in the .land of Saudi Arabia?3. Who are the major players in the Islamic market and what role do they play in the business legal proceeding?4. To what extent are the major players same(p)ly to influence the operations of the Islamic commodity market?5. What potential effects does regulation of the Islamic commodity market pitch on the Islamic pay and the usual business transactions?Research objectivesThe main intention of this research study is to establish, the immenseness of establishing a regulator in the Islamic commodity market especially in the suggested location Saudi Arabia. The importance of the regulator is assessed in terms of the effects to the Islamic financial market, as well as the general business transactions. The research study is intended at providing a goodly bases upon which conclusive r esearch findings muckle be do, as to the need for regulating the commodities market. both the secondary and basal data impart be analysed to assess the current state of operations of the Islamic commodities market, and the need for a regulator. Therefore, data allow highlight the importance of establishing the current state of operations in the Islamic commodity market, and finally, for the research study to meet its intended research objectives (Taylor & Francis throng and Dean, 2004).2.0 Literature reviewIslamic commodity marketThe establishment of a explicit Islamic commodity market, whereby a number of investments as well as financial backing activities are established in union to the requirements of the Shariah principles, can be expound as the outcome of the continued growth of the Islamic financial sector. There generate been demands to address the issues of liquidity of the Islamic banks similar Altauaruq and Almurabha among others, as well as the takaful operato rs in the various Islamic countries. There have in addition been efforts to establish a regulative framework for the Islamic commodity market, and arrive clear the Shariah principles on the commodities which should are allowed to be involved in the business transactions at the commodity market (Davis and Azizian, 2006).In general, the Shariah principles that govern the conduction of business transactions at the commodities market states that the non well-grounded transactions are those activities, which involves the practise of interest and the commodities that have a sure level of uncertainties attached to them. Gambling is also prohibited as well as food and drinks among mevery other disgraceful activities (International Monetary Fund, 2006).Regulatory frameworkIn the commodities market, an effective legal and supervisory as well as a regulative framework establishes the essential ground for the operations of a modern commodity market. For the dynamic market like the Islam ic commodity market, it is crucial that a conducive form of regulatory framework be established. This is to suitably control the activities of the Islamic commodity market. A number of participants are allowed to address, all of the influences which happen upon the effective business operations of the market, as well as the innovations or unconstipated hinder the participation in the Islamic commodities market (Henry and Wilson, 2004).Considering the levels and number of business activities being carried out at this market, an analysis is being made to determine the need for having a regulator in place within this conventional market. The first speculation which can be established in this research study is whether, the establishment of the Islamic commodity market provide make any positive influence on the levels of Islamic finance, as the other regulatory frameworks have managed to influence the other Islamic finance markets (Fadzli, 2003). To that extent, the second hypothes is is to assess the extent to which, the regulator of the Islamic commodity market exit not make any improvements. Considering that the operations at the Islamic commodities market involve both legal and non legal business transactions, the third hypothesis is made in relation to whether the establishment of the regulator leave behind cut cut the levels of particular of the illegal business transactions. The fourth hypothesis in that respect is that, the establishment of the regulator forget not cut down the level of the illegal business transactions at the Islamic commodity market. By justifying the above mentioned hypotheses, the research study will have established the importance of having a regulator in the Islamic commodity market, and in this case the proposed regulator is Saudi Arabia (Al-Rifai, 2003).3.0 Research design and methodologyTo establish the need for having a regulator Islamic commodity market, especially in the land of Saudi Arabia, the research ingest for t his research study will be administered with questionnaires. The targeted respondents are the to the top management officers of the major commodity markets and financial institutions in the Islamic commodity market. The sample population shall be 50 companies in the Islamic commodity market. The sample population has been chosen so as to avoid the feasibility problems, associated with the research studies. qualitative as well as vicenary data will be collected. numeric data shall be collected from the primary sources, which shall be analysed by the use of statistical techniques, compiled and presented using tools like graphs and charts among other techniques. soft data shall be collected by the use of open ended questions in the questionnaires, which will be subjective in nature as they will oppose the personal opinions of the targeted respondents. The qualitative data will support the numerical data, in areas where the quantitative data will be having deviations from the facto rs at a lower place consideration (Al-Rifai, 2003).The slew questionnaires shall be administered, considering the fact that they are easy and simple to use on the part of the researcher and the respondents. The research objectives and questions shall all be encompassed in the selective cultivation in the research questionnaires. The qualitative go about will involve the answering of questions which tint to the nature of operations of the commodity market markets, with the intention of establishing the need for having a regulator in the commodity market. Thus the survey study has the potential of highlighting the operations of the commodity market, and the mechanisms involved which demands for regulatory measures to be carried out (Henry and Wilson, 2004).ResourcesIn order to meet the identified research questions and objectives, the researcher will use the relevant literature resources. These sources will include books, Journals and the other relevant publications in the areas of Islamic commodity market and regulations. The friendship as well as the research information which will be encompassed and assessed for stiffness of the research findings, will include resources from online libraries like EBSCO, Amazon, Blackwell publications, the emerald journals and the other sources like Questia (Henry and Wilson, 2004).Access to the study populationOne of the challenges that the researcher anticipates to foregather in carrying out the research study is the accessing the targeted respondents. So as to meet this challenge, the below strategies have been devised, so as to have access to the respondents to encounter the crucial information for the research study. The researcher will obtain authorization letters, which will be approved by the research department at the university. This letters will then be supplied to the top management officers seeking for permission to include them in the research study, and to use their companies as a sample of the rese arch population. In addition to that, the researcher will assure the respondents that the information obtained from the research study shall be used for academic purposes only, and not for any other purposes unless permission is desire from them (Al-Rifai, 2003).