Behaviour of the Islamic Stock Market in a Prolonged Downturn in the Global Market : Empirical Evidence from Malaysia

Mustafa, Siti Aisyah; Ramlee, Roslily; Kassim, Salina

doi:10.12816/0024089

Cited by 5 publications

(17 citation statements)

References 27 publications

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“…For example, (Chkili & Nguyen, 2014) found that exchange rate movements had no significant effect toward stock markets returns within BRICS countries (Brazil, Russia, India, China plus South Africa). However, (Mustafa et al, 2017) found a positive relationship between real exchange rate with Islamic Stock prices in Malaysia. While (Ayopo, Isola, & Olukayode, 2016) which Enquired the relation concerning GDP with stock prices found a positive relationship between GDP and conventional stock prices in Nigeria.…”

Section: Literature Reviewmentioning

confidence: 90%

“…(Abugri, 2008) analyzed the effect of foreign interest rate on conventional stock prices in Latin America. While there were studies which investigated the relationship between foreign interest rate (using the Federal Fund Rate as proxy) in Islamic stock market index in Malaysia ( (Majid & Yusof, 2009) and (Mustafa, Ramlee, & Kassim, 2017)). Yet, these studies did not analyze whether domestic interest rate or foreign interest is more important in determining Islamic stock prices.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Does Foreign Interest Rate Determine Islamic Stock Prices?

Machtra,

Majid,

Dawood

2023

Amwaluna

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This paper aims to investigate whether foreign interest rate determines Islamic stock prices vis-à-vis domestic interest rate. The method applied is the Autoregressive Distributed Lag (ARDL) model to Indonesian data from January 2008 to June 2018. The study found a long-run negative relationship between foreign interest rate with both Islamic and conventional stock prices. Additionally, foreign interest rate is more important than domestic interest rate in determining the price of both types of stocks. Although Islamic stocks are affected by foreign interest rate dynamics, they are less responsive to changes of the Libor than conventional equities. In addition, it is found that GDP, money supply and real exchange rate has a long-run positive relation with both stock price. Thus, although Islamic equity prices are not insulated against foreign interest rates, they are less responsive to international financial markets movements than conventional stocks. For policy, authorities should pay close attention to foreign interest rate dynamics. While policy makers and fund managers in a dual capital market can use Islamic stocks to provide cushion against dynamics of international funds market.

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Section: Literature Reviewmentioning

confidence: 90%

Section: Introductionmentioning

confidence: 99%

Does Foreign Interest Rate Determine Islamic Stock Prices?

Machtra,

Majid,

Dawood

2023

Amwaluna

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“…On the other hand, due to the lack of data availability, there is still a lack of empirical studies on the link between the Islamic stock market or Islamic capital market in general and economic growth. Additionally, the studies in this area have mostly been theoretical (Mustafa et al, 2017). For instance, Ahmad and Alawode (2017) has notionally explained that Sukuk is important for economic development in terms of fiscal support, liquidity management, education, health, infrastructure, as well as the environment.…”

Section: Literature Reviewmentioning

confidence: 99%

Islamic Capital Market-Growth Nexus Pre and Post Ifsa 2013: Empirical Evidence From Malaysia

2023

ijibfr

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This study examines the relationship between Islamic capital market and Malaysian real economic growth pre and post IFSA 2013 from 2007 to 2019. This study adopts both quantitative and qualitative analysis, where Autoregressive Distributed Lag (ARDL) method of cointegration is adopted for the quantitative analysis, while interview session is adopted for the qualitative analysis. The findings found that the link between Shari’ah-compliant Securities (SCS) and the real economic growth is negatively significant, while the link between Shari’ah-compliant Market Capitalization (SCMC) and the real economic growth is positively significant in both short and long runs. It is also shown that IFSA 2013 does assist the Islamic capital market sector to improve the real economic growth in Malaysia via its rules and regulations, as the coefficients and significance of the real economic growth as proxied by the industrial production index (IPI) are improving with the implementation of IFSA 2013. Besides, the qualitative results of the study have shown that Islamic capital market does promote economic growth by ensuring stability in the market and significantly contributing to the environmental, social and governance (ESG) via the implementation of SRI Sukuk, Bond Grant Scheme, ESG Financing/Sukuk, and value-based judgement projects. The work gives some insights into the field of Islamic capital market-growth nexus from the perspective of a developing country, which is Malaysia. It also delves further into the Islamic capital market-growth nexus by considering the effect of IFSA 2013.

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“…Therefore, Autoregressive Distributed Lag (ARDL) model is more flexible in assessing the I(0) or I(1) conditions (Pesaran, Shin, & Smith, 2001). This explains why it was widely used in previous studies (Alhassan & Fiador, 2014;Bhattacharya, Bhattacharya, & Basu, 2019;Mustafa, Ramlee, & Kassim, 2016). ARDL is illustrated as follows (Pesaran, 2015):…”

Section: Operational Definition Of Variablesmentioning

confidence: 99%

Determinant of Market Share in the Indonesian Islamic Banking Industry

Hanafi

2021

muqtasid

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Market share determines the position of revenue and public utilization of Sharia bank. This research aims to examine the internal and external determinant factors of Indonesia Sharia banking market share. The secondary data were obtained from the Financial Services Authority (OJK) and Bank Indonesia (BI). Autoregressive Distributive Lag (ARDL) was used to explore the short and long periods from the inﬂuence of variables, including total of oﬃces, customers, third-party saving (DPK), and promotion. The results showed that the total number of Automated Teller Machines (ATM) had a contrastingly diﬀerent impact. Therefore, this research recommends adding all variables quantitatively.

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Behaviour of the Islamic Stock Market in a Prolonged Downturn in the Global Market : Empirical Evidence from Malaysia

Cited by 5 publications

References 27 publications

Does Foreign Interest Rate Determine Islamic Stock Prices?

Does Foreign Interest Rate Determine Islamic Stock Prices?

Islamic Capital Market-Growth Nexus Pre and Post Ifsa 2013: Empirical Evidence From Malaysia

Determinant of Market Share in the Indonesian Islamic Banking Industry

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