1. NAME OF COURSE  / MODULE MONEY AND CAPITAL MARKET
2. COURSE CODE MFA3023
3. NAME(S) OF ACADEMIC STAFF  
4. RATIONALE FOR THE INCLUSION OF THE COURSE/MODULE IN THE PROGRAMME This course exposes student to the principal and operation of money and capital markets in Malaysia. Knowledge on this subject is essential as both markets are the integral part of the Muamalat (Islamic banking and financial) system in the country.
5. SEMESTER & YEAR OFFERED Semester 5 & 6 / Year 3
6. TOTAL STUDENT LEARNING TIME (SLT) Face to face:

L T P O
28 26 5

L=lecture ; T=Tutorial; P=Practical; O=Others (Exam)

Total Guided and Independent Learning:

121
7. CREDIT VALUE 120/40 = 3.00 (3 credit); 2+2
8. PREREQUISITE (IF ANY) NIL
9. OBJECTIVES 1. To provide students with the basic knowledge on Malaysian financial system particularly on the Islamic money and capital markets.

2. To know the roles and functions of Bursa Malaysia, Securities Commission and foreign exchange market (Forex)

3. To discuss current issues related to the contribution of money and capital market towards the development of Malaysian economy.

10. LEARNING OUTCOMES At the end of the course, learners will be able to:

1. Explain the components of Malaysian financial system in general as well as the Islamic financial system in particular (LO1-C2).

2. Compare and differentiate the characteristics of money and capital markets (LO3-CTPS2,C2; LO4-CS3,P1)

3. Identify and explain the types of financial instrumentsand the securities issuance process (LO1-C2; LO4-CS3, P1).

4. Explain the development and performance of shariah compliant investment (LO6-EM2,A3)

11. TRANSFERABLE SKILLS Student should be able to develop a good understanding of background of Islamic money and capital market in Malaysia through a process of lectures, tutorial and group assignment.
12. TEACHING-LEARNING AND ASSESSMENT STRATEGY Teaching-learning strategy:

· The course will be taught through a combination of formal lectures, exercise, group work, using authentic materials, informal activities and various textbooks. Collaborative teamwork will be fosters throughout the course. The use of examination and internal reporting assessment will assess the student’s ability to apply theoretical concept in context.

Assessment strategy:

· Formative

· Summative

13. SYNOPSIS This course introduces students with the fundamentals, principles and concepts of money and capital markets in Malaysia. It also provides an overview of the development ofIslamic financial system. Among the topics covered are the roles and functions of Bank Negara, Securities Commission and Bursa Malaysia in facilitating the growth of the industry. The course also discusses the current issues related to development of Islamic investment instruments such as Islamic unit trust, sukuk and Islamic derivatives products.
14. MODE OF DELIVERY Lectures and tutorial (SCL)
15. ASSESSMENT METHODS AND TYPES
Component %
Continuous Assessment 50
Final examination 50
Total 100
16. CONTENT OUTLINE OF THE COURSE/MODULE AND SLT PER TOPIC
TOPIC Lecture Tutorial Test/Quiz/Exam Assignment Assessment (Library Search) Self-study Total
Financial System in General 2 2 3 7
Financial System in Malaysia 2 2 3 7
Islamic Financial System in Malaysia 2 2 3 7
Central Bank and Monetary Policy: Bank Negara Malaysia 2 2 4 8
Understanding Interest Rates 2 2 3 7
Money Markets 4 3 6 13
Capital Markets 4 3 4 11
Sukuk and Bond Market 4 4 6 14
Derivative Market 4 4 6 14
Foreign Exchange Market (FOREX) 2 2 4 8
Continuous Test/Quiz/Assessment 2 6 4 12
FINAL 3 9 12
TOTAL 28 26 5 6 13 42 120
17. REFERENCES Main reference:

1. Jeff Madura, 2010, 9th Edition,Financial Institutions and Markets, South-Western Cengage Learning.

Additional references:

1. Securities Commission, 2008, Islamic Capital Market, Kuala Lumpur.

2. ISRA, 2012, Islamic Financial System: Principles and Operations, Kuala Lumpur.

3. Frederic, S. M and Stanley, G.E. 2009. 6th Edition. Financial Markets and Institutions. Prentice Hall.

4. Frederic, S. M. 2009. 2nd Edition. Economics of Money, Banking and Financial Markets.Prenhall

5. Peter, S.R. and Milton, M. 2008. 10th Edition. Money and Capital Markets. McGraw-Hill.

6. Securities Commission, 2009. Sukuk, Islamic Capital Market Series, Sweet and Maxwell Asia. Kuala Lumpur.

 

Mapping of the course/module to the Programme Learning Outcomes

TOPIC

Contact hours (week)

Lesson Learning Outcome

(Students are able to…)

CLO KI Teaching & Learning Activities Assessment Tasks
Financial System in General

  • Overview of financial markets.
  • Functions of financial markets.
  • Financial system.
  • Types of financial markets.
  • Primary versus secondary markets
3 1. Explain the basic component of financial system.

2. Understand the contribution of financial markets to national economy.

3. Elaborate the difference between primary and secondary markets.

LO1

LO1

o Lecture

o Tutorial activity – exercises

·  Feedback on tutorial activity
Financial System in Malaysia

  • Roles and functions of Bank Negara Malaysia.
  • Roles and functions of Securities Commission.
  • Financial institutions in Malaysia.
  • Financial instruments
3 1. Explain the roles and functions of Bank Negara Malaysia (BNM), Securities Commission (SC) and Bursa Malaysia LO1 o Lecture

o Tutorial activity – exercises

·  Feedback on tutorial activity
Malaysian Islamic Financial System

  • Overview of Islamic banking, Takaful and Islamic Money and Capital Market
  • Shari’ah Governance of Islamic money and capital market
  • Islamic Banking Act (1983), Takaful Act (1984).
4 1. Explain the growth of Islamic money and capital markets in Malaysia.

2. Appreciate the development of shari’ah governance of Malaysian Islamic financial institutions.

3. Familiar with the content of Islamic Banking and Takaful Acts.

LO1

LO3

CTPS3 o Lecture

o Tutorial activity – exercises

·  Feedback on tutorial activity
Central Bank and Monetary Policy: Bank Negara Malaysia

  • Roles and functions of central banks.
  • Monetary policy.
  • Money and inflation
  • Monetary Policy from Islamic Perspective
7 1. Know the roles played by Central Bank of Malaysia in regulating banking and finance industries.

2. Discuss the issue of monetary policy

3. Familiar with the discussions regarding monetary policy revoked by Muslim economists

LO1

LO3

CTPS3 o Lecture

o Article searching via internet / library

·  Feedback on tutorial activity
Understanding Interest Rates

  • Determinants, measurement & calculation of interest rates.
  • Behaviour of interest rates.
  • Term structure of interest rates.
  • Yield curve.
  • Analysis of rate of return of Islamic investment instruments
4 1. Understand the determinants/behavior of interest rate.

2. Know factors that influence interest rate.

3. Discuss the issue of similarities between interest rate of conventional banks and rate of return of Islamic banks.

LO1

LO3

 

CTPS3

o Lecture

o Tutorial activity – exercises

·  Feedback on article searching
Money Markets

  • Analysis of money markets.
  • Instruments of the money markets – treasury bill, letter of credit, banker’s acceptance, certificate of deposit.
  • Analysis of Islamic money market instruments
7 1.   Describe and explain the salient features of various money market instruments.

2.   Analyse the distinction of Islamic money market instruments as compared to the conventional one.

LO1

LO3

LO6

 

CTPS3

EM2

o Group active reading

o Preparation of concept map

o Presentation

·  Group active reading

·  Preparation of concept map

·  Presentation

Capital Markets

  • Equity market.
  • Debt market.
  • Common stock market.
  • Initial Public Offerings (IPO).
  • Roles of investment banks.
  • Shari’ah compliant investment:
  • Islamic Unit Trust
  • Halal Stock
4 1. Differentiate between equity and debt market.

2. Describe the characteristics of each market.

3. Know the development and performance of shari’ah compliant investment.

LO1

LO3

LO6

 

CTPS2

EM2

o Lecture

o Article searching via internet / library

·  Feedback on article searching
Sukukand Bond Market

  • Structure of sukukmurabahah, ijarah and mudarabah
  • Risks in sukuk
  • The transactions and types of bonds.
7 1.Explain the structure of sukuk murabahah, ijarah and mudarabah.

2. Discuss risks underlying sukuk products

3. Familiar with critics pertaining to the implementation of islamic commercial contracts in issuing sukuk

4. Compare risks underlying sukuk with bonds

LO1

LO4

LO3

 

CS3

CTPS3

o Group active reading

o Preparation of concept map

o Presentation

· Group active reading

· Preparation of concept map

· Presentation

Derivative Market

  • Forward
  • Futures
  • Options.
  • Swap
  • Issues of the development of Islamic derivative instruments
8 1. Understand the concept of derivative market.

2. Discuss and differentiate various types of derivative products in the conventional market.

3. Discuss issues and challenges faced by the Islamic financial institutions in coming out with the so-called Islamic derivatives products.

LO1

LO3

LO4

LO6

 

CTPS3

CS3

EM2

o Group active reading

o Preparation of concept map

o Presentation

· Group active reading

· Preparation of concept map

· Presentation

Foreign Exchange Market (FOREX)

  • Exchange rates – spot rate and forward rate
  • Development of Islamic FOREX
4 1. Understand the operation of foreign exchange rate in the conventional market

2. Discuss the development of Islamic FOREX.

LO1

LO6

LO4

 

EM2

CS3

o Group active reading

o Preparation of concept map

o Presentation

· Group active reading

· Preparation of concept map

· Presentation