23. Al-Mu’minun/The Believers
I/We begin by the Blessed Name of Allah
The Immensely Merciful to all, The Infinitely Compassionate to everyone.
23:01
a. Indeed, The Believers will succeed.
23:02
a. The Believers are those who humble themselves in their Salat/Prayers,
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a. and those who avoid frivolous talk and behavior,
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a. and those who regularly pay out the Zakat/annual charity,
23:05
a. and those who guard their chastity -
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except from their spouses or from those whom their right hands possess -
for then, indeed, they are free from blame.
23:07
a. But whoever seeks beyond that limit, those - they are the transgressors,
23:08
a. and those who faithfully keep their trusts, pledges, contracts, and promises,
23:09
a. and those who guard their Salat/Prayers from worldly distractions.
23:10
a. It is they - they are the inheritors -
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who will inherit the Paradise of Firdaws,
they will live therein forever!
23:12
And, indeed, WE created the human being out of the essence of clay.
23:13
Thereafter, WE made him as a mingled drop in a secure repository of the female’s womb.
23:14
And, then, WE made an embryo/clot from the drop,
and then WE made a lump from the embryo/clot,
and, then, WE made bones from the chewed-up lump,
and, then, WE clothed the bones with flesh and muscles.
And, then, out of that tiny drop, WE structured him into yet another creation.
So Exalted is Allah - the Best Creator of all creators!
It is incontrovertibly true that Islam advocates peaceful coexistence with the adherents of other creeds. The holy Qur’an, the primary source of Islamic Shari‘ah, vividly recommends freedom of conscience and religion. Similarly, the prophet (SAW), being the perfect role model for the entire humanity, preached and practiced the lofty ideals propounded by the holy Qur’an and peacefully coexisted with the followers of Judaism and Christianity. Furthermore, the four rightly guided caliphs exhibited tolerant attitude towards their Jews and Christian subjects. In the presence of these models, nonetheless, many contemporary critics of Islam are disinclined to admit this explicit reality. Robert Spencer also sees eye to eye with them. Robert Spencer is an American author and he has published twelve books. He is a member of Melkite Greek Catholic Church. He looks on Islam as a highly intolerant religion. In this connection, he singles out Muhammad’s (SAW) treatment of various Jewish tribes. He maintains that all Jewish tribes viz. Banu Na╔hir, Banu Qaiʽn┴q┐ʽ and Banu Qurai╔ah “received the wrath of Muhammad”. This brief study aims to prove that the treatment meted out to the Jews was not founded on religious prejudice and malice; it was rather commensurate with their wicked demeanor.
The concept of financial conservatism has emerged as a challenging phenomenon for almost all capital structure theories. The use of less than optimal debt level in the capital structure is called financial conservatism. As, cash is considered as an alternative for debt, thus, “firms in the lowest quintile of net debt ratio are classified as financially conservative (FC) firms”. This phenomenon is fairly in contrast to the basic premise of capital structure theories so it has grabbed the attention of academics in recent decade. Surprisingly, some researchers have proved that financial conservatism positively influence the shareholders’ value. However, the empirical evidence is scarce. Especially, this phenomenon is not yet examined in Pakistan. The aim of this study is not only to investigate the determinants of financial conservatism but also to examine its impact on the shareholders’ wealth in Pakistani firms. This also contributes the literature by comparing the speed of adjustment towards target capital structure between financially conservative and non-financially conservative firms. Furthermore, the motives as well as long run performance of financially conservative firms are compared between sub groups of financially conservative firms. These groups include dividend paying and zero dividend firms, financial surplus and deficit firms, and business group and non-business group firms. This is the first study that empirically explores the prevalence and determinants of financial conservatism at Pakistani nonfinancial firms during the period 1998–2014. It also examines the empirical determinants of switching from a conservative financial policy to a non-conservative financial policy and vice versa. Along with several firm-specific variables as predictors of the most prominent theories, the effects of macroeconomic conditions and business group affiliation are also investigated. The firms, that rank the bottom quintile of industry-adjusted debt ratio (net of cash) for two sequential years are categorized as financially conservative firms. The financially conservative (FC) firms are assigned a value ‘1’ while rest of the non-financially conservative (NFC) firms is assigned ‘0’ for the purpose of analysis. Due to the binary dependent variable, the determinants are analysed using logistic regression analysis. For the purpose of measuring the target net debt ratio GMM is used. While OLS is used for estimating the speed of adjustment. It is examined when and to what extent these firms adjust their leverage towards the target. The long run performance for financially conservative firms is estimated by taking monthly data of stock returns for 1,2,3,4 and 5 years using CAPM and Fama & French three-factor model. The results of the study show that approximately 14 percent of the firmyear observations are financially conservative. The pervasiveness of this phenomenon can be judged from the fact that the ratio of financial conservatism almost doubled over that period, from 11.25 percent in 1999 to 20.76 percent in 2014. More than 30 percent of the firms maintain this policy for at least five years. The financially conservative firms are more profitable, less risky, and pay higher dividends than their counterparts. The results of the logistic regression reveal that the pecking order theory and financial flexibility are the most powerful motives for avoiding debt financing. Moreover, business group affiliated firms are more likely to follow financial conservatism. The results for speed of adjustment reveal that the adjustment process is quite asymmetric for NFC than FC firms. Moreover, the magnitude of the speed of adjustment (SOA) is always greater for NFC than FC firms. The FC firms show higher SOA when they deviate below the target regardless of financial imbalances. In contrast, NFC firms are more responsive to financial deficits irrespective of the deviation from the target. Both FC and NFC firms move with higher SOA towards the target capital structure when they deviate below the target and face financial deficits. The results of the study show positive and significant alphas for CAPM and Fama & French three-factor model throughout the time periods for FC firms. It can be concluded that FC firms generate positive abnormal returns over the long run. More specifically, the performance of all sub-groups of FC firms divided on the basis of business group affiliation, dividend-paying status and financing needs is positive throughout the investment time horizon. These results show that financially conservative policy positively affects the shareholders’ wealth regardless of any classifications. Financial conservatism can be used strategically for enhancing the shareholders’ value over the long run. Low net debt ratio of a firm can be considered as an important determinant of market returns