Analysis of the effect on inflation, interest rate, dow jones Islamic Malaysia Index and profitability on stock prices as selected as Indonesia Sharia Stock Index

Abstract

Purpose - The purpose of this study was to analyze what influences the change in the ISSI price index. The analysis was based on the phenomena and hypotheses that occur in the capital market by examining whether there is an influence of inflation rates, interest rates, and the Dow Jones Islamic Malaysia Index as external factors, as well as profitability such as Return on Assets and Earning per Share as internal factors that have an influence on changes and fluctuations in the Sharia Stock Index.Method - The population in this study are all stocks that are encoded in the Indonesia Sharia Stock Index (ISSI) listed on the Indonesia Stock Exchange. Based on the Sharia Stock Exchange and the number of shares indexed by ISSI was 408 shares which shares were classified into 11 types of business. The study was conducted by analyzing multiple regression with t-test, significance test, F test, and classical assumption test.Result - Based on the research results of bank interest rates and the Dow Jones Islamic Malaysia Index which affect stock prices indexed as Indonesia Sharia Stock, the two variables are the external influence of the issuers of the shares. And the majority of these stock prices are strongly influenced by variable factors not examined.Implication - This research indicates that the factors that influence stock prices indexed as Islamic stocks in Indonesia, the analysis of the coefficient of determination is not significant at 0.6%, to find out other factors, other variables are needed for further research.Originality - This research is a continuation of previous research but uses different variables from previous researches, where the dependent variable is stock prices indexed as Indonesian Islamic stocks and the independent variable is the inflation rate, interest rate, and the Malaysian Islamic Dow Jones Index as factors.

Examining the Role of Inflation Moderation in Mitigating the Impact of Crude Oil Prices on Indonesia's Sharia Stock Market

“…Studies have found that inflation rates can affect the returns of both Islamic and conventional stock markets, with some research indicating a positive long-term relationship between inflation and stock market returns (Jelilov, Iorember, Usman, & Yua, 2020;Kwofie & Ansah, 2018). However, other studies suggest that inflation may have a negative impact on the Sharia Stock Market index in the short term, especially during economic shocks such as the COVID-19 pandemic (Halim, 2020;Suriani, Nasir, & Ernawati, 2022).…”

Pengujian Efek Kurs, Suku Bunga, dan Inflasi terhadap Jakarta Islamic Index

“…Pengaruh variabel ekonomi makro terhadap indeks saham konvensional dieksplorasi dalam penelitian oleh Candy & Winardy (2019), Ranto (2019), Sinay et al (2018) dan Thamrin & Sembel (2020). Sebuah studi yang meneliti dampak variabel ekonomi makro pada indeks saham syariah diteliti oleh Ahmed et al (2018), Kumar & Sahu (2018), Mashudi et al (2020), Halim (2020) dan Junaidi et al (2021). Studi sebelumnya mengasumsikan bahwa karakteristik pasar yang berbeda menyebabkan perilaku dan risiko pasar yang berbeda.…”

The Effect of Dow Jones Islamic Market World Index, Foreign Exchange, Foreign Investment and Domestic Investment with the Intervening Composite Stock Price Index on the Indonesian Sharia Stock Index

“…OJK Regulation Number 15/PJOK.04/2015 concerning Application of Sharia Principles in the Capital Market states that Sharia Securities are Securities as referred to in the Capital Market Law and its implementing regulations, operating procedures, business activities; the assets that form the basis of the contract, and/ or assets related to the said Securities and their issuers do not conflict with the Sharia Principles. Sofyan Halim (2020), quoting from idx.co.id, and Nur Imamah, Tsui-Jung Lin, Suhadak, Siti Ragil Handayani, Jung-Hua Hung (2019), stated that the Indonesian Sharia Stock Index (ISSI) is a composite stock index sharia shares listed on the IDX and began to be issued on May 12, 2011. ISSI is an indicator of the performance of the Indonesian sharia stock market.…”

“…The development of global Islamic stock indices, including the Dow Jones Syariah Market Index, has quite influenced the development of portfolio investment in various global exchanges, including in Indonesia, and this has also affected the Islamic stock market price, based on the results of research by Retno Fuji Oktaviani (2017), and Halim (2020) who examined International Sharia Stock Price Index against the Jakarta Islamic Index. The conclusion of the study shows that JII is significantly influenced by DJII USA and DJIM.…”