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Demand for construction Project Finance has developed in recent years as construction projects have become more elaborate requiring more expensive and specialised technologies for their execution. Contractors' involvement with banks when operating in the United Arab Emirates usually starts at the bidding stage with the issue of bid bonds. This develops into larger commitments following their request' for performance bonds and finance facilities when they are awarded the contracts. The aim of this researchi s to investigate lending banks' assessmentso f contractors operating in the UAE, and the latter's financial requirements in order to execute various construction projects. It further aims to reconcile the needs of the construction contractor to those of the lending banks and arrive at an acceptable level of risk sharing and reward. A method of research has been adopted which includes a literature review, interviews with selected bankers and contractors, the development of case studies, and a field survey by means of questionnaires sent to both borrowers and lenders. Data relating to twenty-eight construction projects that used Project Related Finance for their execution was analysed to see if there was common ground for adoption of Project Related Finance strategy. The questionnaire survey also revealed that while bankers extend both Corporate Finance to construction companies as general limits, and Project Related Finance as limits specific to the project concerned, 73 per cent of contractors that participated in the survey used the latter. The issue of risk management in contracting and the acceptability of risk by contractors as compared to that by bankers are discussed in detail ... (continued).

This thesis makes a theoretical contribution to the design of the capital adequacy assessment framework for Islamic banks. The proposed capital regulation is aimed at enhancing the Islamic banks' operational sustainability. The first analytical section in the thesis discusses the nature of sharing contracts. The analysis helps to explain the current reluctance to use sharing contracts by the players in the Islamic banking system. Each individual will always try to optimise his utility, monetarily as well as religiously, as a form of compliance with religious rules. However, in an adverse condition, religious and risk-averse customers will compromise the two utility objectives (i.e. adopting hybrid types of contract that, to some extent, deliver his minimum required financial return besides also complying with religious norms). The second analytical section in the thesis discusses possible improvements to the capital regulation of Islamic banks. This includes the possibility of enhancing the fiduciary as well as the agency roles performed by the Islamic banks. The analysis produces a number of propositions. The first proposition is to require the banks to have prudent assets-liabilities (capital) structures and to have adequate financial cushions. The second proposition is to require the shareholders of Islamic banks to observe a minimum level of financial participation; and to require the banks to disclose crucial financial information to investors. Theoretically, the higher the level of financial participation and the higher the quality of information provided, the better the quality of the contract entered into by the banks and 'their customers. The last part of the discussion, embracing empirical analysis, shows the important role played by capital in absorbing temporary financial shocks (especially when debt-based deposits are dominant). The discussion also covers the possibility of using statistical techniques for assessing the soundness of Islamic banks' operational activities.

Venture capital as a source of financing high technology, small and medium enterprises (SMEs) is well established in the developed economies. Now, this activity is becoming a focus of attention in emerging markets. India has registered a significant growth in terms of the amount and number of venture capital funds. But there is no academic research to date, devoted to understanding how this new investor class behave through the investment cycle. This research is the first-ever investigation of how venture capitalists in India conduct the Valuation, Structuring and Monitoring of their investments. After introduction, the thesis presents an overview of the Indian economy, followed by its financial landscape. The third chapter covers a survey of the economic contribution that SMEs make and the funding problems they face, together with a review of the Indian venture capital sector. An extensive literature review on venture capital research follows. After finding the research gaps, a theoretical framework, based on the adverse selection, moral hazard, corporate governance, and the asymmetric information that characterises the risk capital market is used. Eight hypotheses are developed to test how venture capitalists address the adverse selection through (a) a variety of information sources used in preparing the valuation memorandum, and (b) applying various quantitative and qualitative methods to determine the realistic value. How do they address moral hazard by (a) using covenants in their deal structures, and (b) what financial products are used to minimise the risk? Finally, how frequently and extensively do they monitor their investee companies to overcome the information asymmetry and corporate governance problems? Data from 40 of the most active 42 venture capitalists operating in India were gathered. Then, the data were analysed using Chi Square, Cluster Analysis, ANOVA and Logistical Regression. The results present a descriptive profile of the Indian venture capital sector, including the characteristics of the fund management teams, the sectors and stages of investments and the tests of the hypotheses. This is followed by methodical statistical analysis by splitting the sample based on seven demographic characteristics. The final chapter includes the conclusion, recommendations and the implications of this research for the venture capitalists, entrepreneurs and regulators. Finally, future research areas are suggested that may further improve the understanding of the venture capital market in India.

Many Indonesian banks suffered problems and some even failed in the early 1990s. This provided evidence that risk-based capital adequacy regulation in Indonesia had failed to prevent banks from taking excessive risks. Such observations provide the motivation for this thesis which seeks to identify the nature of bank risks in Indonesia and also analyses the operation of risk-based capital adequacy regulation in Indonesia. To obtain a general view of risk in Indonesian banks, this thesis includes an empirical study to identify the determinants of problem banks in Indonesia using a logit fixedeffect model. The model also can be used as an "early warning" device in banking supervision. This study finds that credit risk and operational risk contributed significantly to banking problems. State banks, non-foreign exchange banks and regional development banks are shown to be also sensitive to interest rate risk. Foreign exchange rate risk is less significant for banks (by group) in Indonesia. If we examine cases individually, however, there were some bank failures which were due to excessive foreign exchange rate risk. This thesis also finds that the adoption of risk-based capital adequacy regulation in Indonesia contains some deficiencies, such as focusing only on credit risk (ignoring market risk). This study suggests that market risk should be included in capital adequacy assessment and a number of alternative models of risk assessment [exponential weighted moving average (EWMA) and generalised autoregressive heteroscedasticity (GARCH)] are analysed. The results of the empirical study show that the inclusion of foreign exchange rate risk in capital adequacy assessment results in a higher capital requirement than that resulting from the application of the BIS's standardised methodology. This study also finds that the decay factor of 0.94 suggested by J. P. Morgan (J. P. Morgan, 1995, 1996) is irrelevant for [DR (Indonesian Rupiah) exchange rate returns. Additionally, assessment of foreign exchange rate risk using GARCH suggests a lower capital charge than that applicable under the BIS's standardised methodology and EWMA. The policy implications of these findings are also considered.

The Islamic law prohibits charging and paying of interest but allows earning profits on the basis of participation in the market. This legal injunction has motivated the establishment and successful operation of a number of Islamic financial institutions. The emergence and rise of these institutions is an important academic and practical development of our time. The theory of Islamic finance evolved on the basis of profit and loss sharing (PLS) principle underlying participatory Islamic financial contracts. However, the practice of Islamic finance does not conform to the theory and overwhelmingly relies on the mark-up principle which underlies deferred trade. The PLS is in striking contrast to the interest mechanism, but the mark-up is not. The present research inquires the causes underlying the negligence of the mark-up mechanism at the time when the theory was developing. Looking at the preferences of users and suppliers of funds, the causes of the overwhelming use of mark-up in the practices of Islamic finance are also analyzed. Pakistan has remained at the forefront of financial Islamization. The research also draws on this practical experience with a view to explore how the market rewards risk. The study also analyzes the prospects of financial Islamization in a real world scenario in which most Muslim countries rely substantially on foreign financial resources. Thq central conclusion of the study is that the mark-up and PLS mechanisms have their own merits and weaknesses. The merit of the markup is that it facilitates the acquisition of assets. The merit of the PLS is that it links financiers' interests with the outcome of projects. The study concentrates on the analysis of the inherent characteristics of the PLS and mark-up as parent principles of Islamic finance rather than the institutional environment in which these are practiced. It implies that given the market environment, the strength of Islamic finance lies in the integration of the prime merits of mark-up and PLS and in developing a comprehensive set of Islamic financial instruments.