Stress testing
For the purposes of the Investment Funds Regulations, this refers to the preparation of stress testing models and methods for analyzing hypothetical scenarios of the risks faced by the fund, the fund manager’s policy for dealing with them, and sensitivity analysis to measure the level of volatility in the prices of investment fund units in […]
Profit Rate Reserve
The amount set aside from the total mudarabah profits to maintain a certain level of return on investment for the mudarib and unrestricted investment account holders.
Valuation Reserve
A reserve or provision created by charging a specific expense account; therefore, it is deducted from profits to hedge against changes in the value of the company’s assets.
Repurchase Agreement
An agreement to transfer a financial asset to a second party in exchange for cash or other consideration, with a mutual commitment to repurchase the financial asset at a future date for an amount equal to the cash or other consideration exchanged, plus interest.
Market breadth
This refers to a market that receives a large number of buy and sell orders in a way that ensures price stability for the securities traded in it, and in which prices do not change continuously merely because of the high volume of transactions, but because the number of orders above and below the current […]
Sideways Trend
It is a balance between buying power and selling power, where there is a resistance zone that prices cannot break through upward and a support zone that prices cannot break through downward.
Royalty
Compensation to the franchisor in the form of a percentage of profits or share in products. Royalty is one of the essential elements in franchise contracts or licensing agreements, where the franchisor receives periodic financial compensation from the other party using the franchise
Agency (Takaful)
A contract whereby takaful participants or retakaful participants (principals) appoint a takaful operator or retakaful operator (agent) to carry out underwriting and investment activities for takaful funds on their behalf in exchange for a known fee.
Agency
A contract by which the client (principal) appoints the institution as an agent to execute tasks on their behalf, which may be remunerated or gratuitous.
Financial intermediary
A party that handles investors’ buy and sell orders in return for a service commission. A broker specializing in stocks and bonds acts as an agent on the client’s behalf.