Dr. Mejda Bahlous

Associate Professor of Finance

Profile

Dr. Mejda Bahlous holds a Ph.D. in Finance and a Master of Science in Finance from the University of RENNES I, FRANCE. She held academic positions in several universities: the University of Rennes I, (France), University of Maine (France), HEC Carthage (Tunisia) University of Alabama in Huntsville (USA), the University of Bahrain and the American university in Dubai where she was the chair of the Finance and Accounting department before joining RIT Dubai in August 2014. Dr. Bahlous taught Finance courses both at the graduate and undergraduate level. She was also senior a Fulbright scholar at MIT, Sloan School of Management. Her research interest spans many areas in Finance such as Corporate Finance, Financial Markets and Derivatives, Portfolio Management, International Finance, Islamic Finance.  She has several publications in peer reviewed journals and is currently active in research dealing with issues of interest to both emerging and developed markets.

Recent Publications

  • 2016 "Rental rate as an alternative pricing for Islamic home financing: an empirical investigation on the UK Market", International Journal of Housing Markets and Analysis, Vol. 9 Iss: 4, pp. Bahlous M. With Rosylin Mod Yusof and Roszaini Haniffa.
  • 2015 “Are Profit Sharing Rates in Mudharaba Account Linked to Interest Rates? An investigation on Islamic Banks in GCC countries” Forthcoming in Journal Ekonomi Malaysia (JEM)_Bahlous M. With Rosylin Mod Yusof and Hamza Turnsov.
  • 2014 Mejda Bahlous with Rosylin Yusof “International Diversification among Islamic Invetsments: Is there any benefit?” Managerial Finance / Emerald Volume 40 issue 6 2014
  • 2013. Mejda Bahlous “Does cross-listing benefit the shareholders? Evidence from the GCC countries stock markets” Springer - Asia Pacific Financial Markets. April 2013  
  • 2013   Mejda Bahlous (with R. Yosuf) “Islamic Banking and Economic Growth: a panel cointegration Analysis” in Emerald- Journal of Islamic Accounting and Business research. Vol. 4 Iss: 2
  • 2012 Mejda Bahlous (with R. Yosuf) “Financing Patterns, Debt Maturity, and Growth: evidence from the East Asia and the GCC countries” Journal of Applied Banking and Finance, vol.2, no.3, 2012, 199-236. Indexed EconLit, Cabell’s directory (Economics & Finance), DOAJ; EBSCO Academic Source Complete; Econis,; Gale's Academic Databases; Google Scholar; Open J-Gate; ProQuest and Ulrich's Database
  • 2010 Mejda Bahlous, with Rosylin Yusof and Salina H. Kassim: “Ethical investment and shari’ah-compliant investment compared: can investors benefit from diversification?” in Savings and Development. Indexed SCOPUS, Econlit  http://aisberg.unibg.it/handle/10446/27473

Rental rate as an alternative pricing for Islamic home financing: an empirical investigation on the UK Market

Abstract:

Purpose

This paper seeks to contribute to the banking and housing market literature by proposing an alternative measure of rate of return for Islamic banks that is based on the rental rate of the property. This alternative Islamic mortgage pricing mechanism could be adopted by Islamic banks as a replacement for mortgage rates if it is found to be independent from any form of interest rates as required by Islamic law.

Design/methodology/approach

By investigating the short run and long run dynamics between rental price index (RPI) and our proposed Islamic Rental Rate (RR-I) and, three selected macroeconomic indicators in the UK via Autoregressive Distributed Lag Model (ARDL), we examine the link between (RPI) ,(RR-I) and the real economy.

Findings

Our findings provide evidence that while Rental Price Index (RPI) in the UK is significantly related to three leading macroeconomic variables namely GDP, REER and interest rates measures while Rental Rate (RR-I) is only impacted by changes in GDP. More, importantly we show that there is no short or long run dynamics between the rental rate and any form of interest rates.

Research limitations/implications

We did not attempt to investigate the impact of the physical attributes of the rental property to formalize the model describing the relationship between them and our rental rate. Also other macroeconomic factors like household income growth, risk, house value growth rate and taxation could be included in future models.

Practical implications

Since Rental Rate is not linked to the macroeconomic determinants, it is therefore more stable, resilient and sustainable and at the same time, making the financing less risky for both parties as they are less susceptible to economic vulnerabilities.

Originality/value

Our results suggest that Islamic banks should consider incorporating our proposed rental rate(RR-I) when pricing their home financing products as this will lead to less dependence on interest rates for benchmarking. In addition, utilizing the proposed rental rate (RR-I) reduces the exposure to the subjective evaluation by property valuators and speculative macroeconomic elements.

Publisher:

Emerald Group Publishing Limited

Download full paper from this link.