What drives shariah (islamic) stock index? a case study of Malaysia

Khairul Anuar and Abul Masih

MPRA Paper from University Library of Munich, Germany

Abstract: Islamic finance has been rising rapidly as an alternative investment outlet since the subprime crisis. Although there are many papers on the determinants of conventional stock prices, there is relatively much less attention paid to the determinants of Shariah (Islamic) stock indices. This paper analyses the relationship between the major macroeconomic variables and the Shariah Stock Index. Malaysia is taken as a case study. This study examines the determinants of Shariah stock exchange and to what extent each variable influences the prices of the stocks. We use the standard time series method to analyse the data. The findings tend to indicate that inflation rate is the most leading macroeconomic variable followed by Shariah stock index. All other variables are led by them. That implies that inflation rate is the most important driver of Shariah stock

Keywords: Islamic stock index; inflation rate; money supply; interest rate; exchange rate; Malaysia (search for similar items in EconPapers)
JEL-codes: C22 C58 E44 G15 (search for similar items in EconPapers)
Date: 2018-07-30
New Economics Papers: this item is included in nep-isf, nep-mac and nep-sea
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