Factors affecting performance of Islamic Stock Market in Malaysia / Azizi Kassim

This research focused on factors affecting performance of Islamic Stock Market in Malaysia. Research in Islamic stock market has become an interesting topic among investors to recognize the actual return they can acquire, compared to conventional stock market. Although there are numerous studies investigating performance, affecting Malaysia conventional stock market, there still is a certain gap in the literature pertaining to the relationship between Islamic indices and macroeconomic variables which has becoming an interesting area of research due to fast growing force of Islamic finance. This paper examined the long-term equilibrium relationships between FTSE Bursa Malaysia Emas Syariah Index as a proxy for Islamic Stock Market and three selected macroeconomic variables, namely Consumer Price Index (CPI), trade balance and exchange rate. The researchers used monthly data from third month of year 2008 until ninth month of year 2017. Multiple Linear Regression Model was applied to study the relationship between explanatory variables (Malaysia consumer price, Malaysia visible trade balance, and exchange rate between Malaysia Ringgit and U.S. Dollars,) and to explain a variable (Islamic Stock Market).The findings showed that Islamic Stock Market was significant with selected variables in which the Islamic Stock Market was positive and significantly related with Consumer Price Index, but related negative and significant with exchange rate variable. Meanwhile, for trade balance, it showed insignificance and a negative relationship with Islamic Stock Market.