Analysing the Relationship between Oil Prices and Islamic Stock Markets

Arshad, Shaista

doi:10.1111/1759-3441.12186

Cited by 15 publications

(8 citation statements)

References 42 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Sarwat et al (2019) have shown that the causality in the oil market moves from future prices to spot prices of oil. Arshad (2017) has found the simultaneous volatility in both oil price as well as Islamic stock markets is due to the dependence of Islamic stocks on the real economy. Oil price plays a major role as input cost for several industries; it also affects the cost of production indirectly for most of the companies.…”

Section: Literature Reviewmentioning

confidence: 99%

How oil prices, gold prices, uncertainty and risk impact Islamic and conventional stocks? Empirical evidence from QARDL technique

et al. 2020

View full text Add to dashboard Cite

There are shreds of evidence of Islamic securities to behave differently from conventional ones, especially under the influence of certain factors such as oil, gold, economic policy uncertainty, and geopolitical risk. This paper has empirically evaluated such pieces of evidence through Quantile Autoregressive Distributed Lags Error Correction Model. Analysis has been performed on monthly returns from Dow Jones Islamic Market and Dow Jones Conventional Market Indexes for the sample period from January 1997 to July 2019. Results suggest that the Islamic stocks do behave differently from conventional stocks only for the long term in case of oil price influence under bullish market conditions; whereas, under bearish market conditions, economic policy uncertainty causes Islamic securities to behave differently. Hence, investment in Islamic stocks can be used for diversification of conventional securities' portfolio under specific conditions. For instance, under oil price changes Islamic and conventional securities can diversify risk in bullish market trends; such diversification can also be achieved in case of the bearish market trend under economic policy uncertainty shock. The results of this study are significant for policymakers and investors as this will provide a clear picture to the investors regarding their investment with respect to Islamic or conventional markets. A further new basis will be provided to both speculators and portfolio managers of Islamic and conventional markets.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

How oil prices, gold prices, uncertainty and risk impact Islamic and conventional stocks? Empirical evidence from QARDL technique

et al. 2020

View full text Add to dashboard Cite

show abstract

“…There is some research such as Chkili, Aloui, & Nguyen (2014), Arouri, Lahiani, & Nguyen (2011), Filis, Degiannakis, & Floros (2011), Nath, Bandopadhyay, & Mondal (2014, and Arshad (2017), which uses dynamic relationship approach. Chkili, Aloui, & Nguyen (2014) using the United States' stock market as the objects of study, while Filis, Degiannakis, & Floros (2011) studies the dynamic correlation between oil price and stock market of oil-importing and oil-exporting countries.…”

Section: |mentioning

confidence: 99%

The Dynamic Correlation between ASEAN-5 Stock Markets and World Oil Prices

Robiyanto

2018

Jurnal Keuangan Dan Perbankan

View full text Add to dashboard Cite

Various studies on the relationship between world oil prices and stock markets that have been done previously mostly still done by using a static approach or an approach to test whether there is a short-term or long-term relationship. This research scrutinizes the dynamic relationship between world oil price change with the return of ASEAN's main stock markets such as Indonesia, Singapore, Malaysia, the Philippines, and Thailand by using Dynamic Conditional Correlation-Generalized Autoregressive Conditional Heteroscedasticity (DCC-GARCH). The result shows that the correlation between world oil price's change with the return of ASEAN's main stock market was not static but change according to the stock market and commodity market's condition. During the normal period, DCC-GARCH is in the narrow range and stable, but during the period of stock market and commodity market turbulence, DCC-GARCH could alter extremely from positive to negative in some ASEAN countries. Generally, it is concluded that the use of static approach was not appropriate especially for rapidly changing in financial market and commodity market. Keywords

show abstract

“…These findings allow us to speculate on the favorable impact of oil prices on stock prices via corporate cash flows, discount rate (Jouini, 2013), and production cost (Mishra et al, 2019). The existing literature divides countries based on whether they import or export oil when analyzing the connection between oil prices and stock performance (Wang et al, 2013;Arshad, 2017). Furthermore, in Park and Ratti's (2008) study, the influence of oil prices on stock prices in oil-importing European countries was found to be low.…”

Section: Introductionmentioning

confidence: 87%

“…Mishra et al (2019) reported cointegration between the performance of the Dow Jones Islamic Stock Index and global crude oil prices from 1 January 1996 to 13 April 2018. Arshad (2017), having a sample of top 10 oil-importing countries, found the co-movement between the volatility in the prices of oil and volatility in the Islamic stock market. The Islamic stock market's significant reliance on the real economy caused such comovement.…”

Section: Introductionmentioning

confidence: 99%

Impact of oil prices on the Islamic and conventional stock indexes’ performance in Malaysia during the COVID-19 pandemic: Fresh evidence from the wavelet-based approach

et al. 2022

View full text Add to dashboard Cite

The motivation behind conducting this research is to study the association between oil prices and Islamic and conventional stock indexes’ performance in the Malaysian market during COVID-19 using the wavelet analysis technique. The daily data on selected variables were collected from 1 January 2020, to 10 June 2021. Empirical investigation was made with wavelet analysis along with the Toda-Yamamoto test. The results revealed the significant response of both indexes to the oil price. Such response was negative for the short- and medium terms; however, it became positive in the long run. Our research has several important implications and recommendations for asset managers and policymakers. Policymakers and regulators should promote awareness and adopt effective action plans to minimize the risk of change in oil prices during the COVID-19 period. This research will enable investors, scholars, and policymakers to improve their current structure and prepare them for any potential future crisis.

show abstract

Analysing the Relationship between Oil Prices and Islamic Stock Markets

Cited by 15 publications

References 42 publications

How oil prices, gold prices, uncertainty and risk impact Islamic and conventional stocks? Empirical evidence from QARDL technique

How oil prices, gold prices, uncertainty and risk impact Islamic and conventional stocks? Empirical evidence from QARDL technique

The Dynamic Correlation between ASEAN-5 Stock Markets and World Oil Prices

Impact of oil prices on the Islamic and conventional stock indexes’ performance in Malaysia during the COVID-19 pandemic: Fresh evidence from the wavelet-based approach

Contact Info

Product

Resources

About