The Influence of Macroeconomic Variables on The Indonesian Sharia Stock Index (ISSI) for The 2013-2019 Period

Andhi Wijayanto,Indah Nawindra

doi:10.15294/maj.v9i4.41875

Abstract

Investors believe that economic factors have a major impact on developments in the Islamic capital market. This study aims to describe and analyze macroeconomics of the Indonesian Sharia Stock Index (ISSI). The sample of this study consisted of 84 data consisting of all population data, namely all data on closing prices at the end of each month from exchange rates, BI Rate, inflation, world oil prices, world gold prices, and the Indonesian Sharia Stock Index (ISSI) for the period January 2013 - December. 2019. The analysis technique used is the Error Correction Model (ECM). The results showed that in the short term the exchange rate variable had a significant effect on the ISSI, while the BI Rate, inflation, world oil prices and world gold prices had no effect on the ISSI. In the long run, the variable exchange rate, BI Rate, inflation and world gold prices have a significant effect on the ISSI, while the world oil price variable has no effect on the ISSI

Highlights

An increasingly advanced economic development will open people’s minds to a more modern direction, especially in terms of investing the funds they have
The results of the analysis show that the BI Rate variable has a significant effect on the Indonesian Sharia Stock Index (ISSI), which means that stock investors pay close attention to movements in domestic interest rates to make investment decisions
Based on the results of research that has been conducted regarding the influence of macroeconomic variables on the Indonesian Sharia Stock Index (ISSI) for the period 2013 - 2019, it can be concluded that the exchange rate in the short term is a significant negative on the Indonesian Sharia Stock Index (ISSI)

Summary

Introduction

An increasingly advanced economic development will open people’s minds to a more modern direction, especially in terms of investing the funds they have. The presence of a capital market in a country is considered very important to drive the national economy which functions as a facility provider to facilitate companies and issuers in obtaining funds (Rachmawati & Laila, 2015). Capital market conditions in Indonesia are reflected in the stock price index. In Indonesia the capital market is regulated in Law Number 8 of 1995. The existing capital market contains various things that deviate from sharia principles (Nazir, 2016). This is a problem because Indonesia is one of the largest Muslim countries in the world (Suciningtias & Khoiroh, 2015), which the majority of the population in Indonesia is Muslim

Objectives

Methods

Results

Conclusion