The Technical Approach for Measuring the Performance of the Malaysian Shariah Stocks During the COVID-19 Outbreak

Abstract

The COVID-19 outbreak affects all aspects of life including stocks trading. This paper aims to highlight the performance of Malaysian Shariah stocks during the COVID-19 outbreak by employing modified Reward to Variability (mRVAL) and EMA (Exponential Moving Average). The analysis of individual stocks started by mRVAL to consider the risk-adjusted return and followed by EMA to predict the buy or sell momentum. The dataset considers the historical price of the top-rated constituents of FTSE Bursa Malaysia EMAS Shariah Index among the three waves of the COVID-19 outbreak in Malaysia, particularly in 2020. The result shows that TPGC outperforms others in the risk-return ratio with a value of 0.0621. Meanwhile, the buy signal of TPGC falls on October 1, 2020, while the selling momentums are suggested around a month before and after the buy signal. Overall, most of the shariah stocks showed a downward trend of volatility in 2020 compared to the previous year. However, TPGC (a health care sector) has surprisingly improved during the COVID-19 outbreak.