DOES COVID-19 AFFECT SHARIAH COMPLIANT STOCK? EVIDENCE FROM SELECTED OIC COUNTRIES

Title

DOES COVID-19 AFFECT SHARIAH COMPLIANT STOCK? EVIDENCE FROM SELECTED OIC COUNTRIES

Creator

Shaikh Z.H.; Irfan M.; Nomran N.M.; Abey J.

Description

This study aims to examine the movements of Islamic stock markets in ten selected OIC (Organization of Islamic Cooperation) countries in relation to Covid-19 cases, providing a comprehensive analysis of market behavior during the pandemic. The countries-Saudi Arabia, Pakistan, Bangladesh, Turkey, Indonesia, Oman, Qatar, UAE, Kuwait, and Bahrain-were chosen based on their large Muslim populations. Data was collected over a one-year period from January 1, 2020, to January 31, 2021, analyzing the relationship between Covid-19 cases and Islamic stock market indices. The study employed co-integration tests to identify long-term relationships and the Vector Error Correction Model (VECM) to explore short-run dynamics. The co-integration test results show a significant long-run relationship between Covid-19 cases and Islamic stock markets in most of the selected OIC countries. Specifically, the Shariah indices in Pakistan, Bangladesh, Turkey, Qatar, UAE, Kuwait, and Bahrain have a positive and significant relationship with Covid-19 cases. Conversely, Saudi Arabia, Indonesia, and Oman exhibit a negative long-term relationship with Covid-19 cases, suggesting a different market response. These results suggest that countries with diversified economies, particularly those relying on natural resources such as oil and agriculture, were more resilient during the pandemic. This study provides novel insights into the unique responses of Islamic stock markets in OIC countries during the pandemic, highlighting regional differences in market behavior and recovery. It suggests that despite the global economic downturn, OIC countries present attractive investment opportunities, particularly due to their swift recovery and resource-based economies, offering a robust portfolio for investors during crises. 2024 by the author(s).

Source

Jurnal Ilmiah Ilmu Terapan Universitas Jambi, Vol-8, No. 2, pp. 720-731.

Date

2024-01-01

Publisher

Jambi University

Subject

Co-integration; Covid-19 cases; Islamic stock market; OIC countries; VECM

Coverage

Shaikh Z.H., Department of Finance and Accounting, College of Business Administration, Kingdom University, Riffa, Bahrain; Irfan M., School of Business and management, Christ University, Bengaluru, India; Nomran N.M., Department of Finance and Accounting, College of Business Administration, Kingdom University, Riffa, Bahrain; Abey J., Department of Finance and Accounting, College of Business Administration, Kingdom University, Riffa, Bahrain

Rights

All Open Access; Gold Open Access

Relation

ISSN: 25802240

Format

Online

Language

English

Type

Article

Identifier

https://doi.org/10.22437/jiituj.v8i2.33159

https://www.scopus.com/inward/record.uri?eid=2-s2.0-85209810357&doi=10.22437%2fjiituj.v8i2.33159&partnerID=40&md5=baccaeb892afc75bbf4a1229d908fefc