Islamic Investment Research Articles

Bridging Borders: Integrating Islamic Finance and Halal Tourism in the North American Market

This paper explores the integration of Islamic finance and halal tourism in the North American market. Islamic financial institutions in Malaysia have played a significant role in supporting infrastructure projects like hotels, resorts, and theme parks through Sharia-compliant financing. Islamic investment funds and equity partnerships provide opportunities for Islamic finance institutions to mobilize capital for tourism-related projects while adhering to Islamic finance principles. Islamic finance can facilitate the expansion and sustainability of Islamic finance initiatives while promoting financial inclusion and sustainable growth. The North American market presents significant prospects for development and innovation, with its solid financial infrastructure, diverse population, and stringent regulatory frameworks. Halal tourism, which follows Islamic law and caters to the unique needs of Muslim travellers, is expected to reach $300 billion by 2024. The combination of Islamic finance and halal tourism offers a promising chance to connect regions and stimulate economic expansion in the North American market. The Islamic finance industry in North America is estimated to be valued at approximately $50 billion, encompassing sectors such as Islamic banking, Sukuk issuance, Islamic insurance, and Halal investment vehicles.

An Islamic Inter‐Temporal Capital Asset Pricing Model: Evidence From GCC Indexes

ABSTRACTOur study examines the multi‐period Islamic investment issue in GCC markets. We assess the validity of ICAPM by incorporating market dynamics: volatility and uncertainty. To test the predictive power of these factors over time, we employ Engle's (2002) dynamic conditional correlation framework and compute the DCC between Islamic stock index returns and three key variables: the GCC Islamic index (market index) and market state variables (volatility and uncertainty). For cross‐sectional variation, we follow Bali and Engle (2010) and estimate the seemingly unrelated regression (SUR) after measuring dynamic covariance. We report heterogeneous results revealing a complex relationship between market risk factors and expected returns. While the introduction of market volatility and uncertainty factors generally resulted in a negative risk premium, the specific impact varied across different markets. Interestingly, the Saudi index, holding significant weight within the GCC index, shows a negative risk premium and a positive uncertainty premium in the short‐term. Accordingly, investors seek a premium for uncertainty and accept a discount for volatility in the Saudi market. However, in the long term, a traditional positive risk–return relationship is observed. The cross‐sectional results reveal that both GCC index fluctuations and shifts in market volatility are associated with a negative risk premium, in the short term. Whereas, an increasing market uncertainty leads to a higher expected return in the following month. This study adds novelty to the literature related to the pricing of Shari'ah‐compliant assets by testing the inter‐temporal CAPM for these assets and showing the usefulness for investors. Indeed, the implementation of a multi‐period investment plan across Islamic GCC indexes can help investors mitigate adverse changes in market volatility and uncertainty.

Application of Maqasid al-Shariah in responsible investment (MSRI) and practices towards ESG

This paper aims to develop a holistic framework for the Maqasid al-Shariah in Responsible Investment (MSRI) index for selected publicly listed companies in the Malaysian capital market. To test the validity of the MSRI framework, a sample of 30 publicly listed companies from 2021 was selected using purposive sampling. The framework consists of eight themes with forty-five elements to evaluate companies based on their annual reports, sustainability reports, and public disclosures. The scores are classified into three categories: Shariah compliant, Shariah non-compliant, and Hajiyyat. Out of the 30 selected companies, the summary of MSRI scores concludes that twenty (20) companies were identified as Shariah compliant, while the remaining four (4) were classified as Shariah non-compliant, and six (6) as Hajiyyat. Overall, the results of the analyses show that the sustainability of the company and society has a higher percentage than the wealth preservation of companies. This research differs substantially from prior work by offering a novel approach that develops a holistic framework integrating Maqasid al-Shariah with elements of responsible investment. This study believes it can provide valuable guidance for formulating Islamic investment public policy for selected investment portfolios.

DYNAMICS OF GENERATION Z SHARIA INVESTMENT DECISIONS : THE ROLE OF FINANCIAL LITERACY, INFLUENCERS, SOCIAL MEDIA AND RELIGIOSITY

This research aims to identify the factors that influence Generation Z participation in Islamic investing. Given the significant increase of Islamic investors this study seeks to delve deeper into the roles of financial literacy, the influence of influencers and social media, and the aspect of religiosity as considerations in investment decision making. This qualitative research was conducted through in depth interviews with 10 Generation Z individuals in East Java province. The results show that financial literacy serves as the primary foundation in motivating Generation Z to engage in Islamic investing. Additionally, the influence of influencers and social media, as well as the awareness of the importance of managing finances in accordance with Islamic principles, are significant factors. These findings are expected to contribute to enhancing the financial literacy of Generation Z and serve as a basis for developing effective halal campaigns. By understanding the factors influencing Generation Z investment decisions Islamic capital market players can design products and marketing strategies that are suitable for increasing the number of Islamic investors in Indonesia.

Prinsip-Prinsip Muamalah dalam Perspektif Ekonomi Islam

Muamalah in Islam deals with financial issues with the principles of justice, efficiency, transparency, anti-riba, anti-gharar (uncertainty) and social responsibility. This study was conducted with the aim of examining the principles of muamalah from an Islamic economic perspective and how these principles can be applied to the modern economy. The introduction of this study highlights the importance of Muamalah maintaining ethics and morals in economic transactions, especially in the face of increasingly complex global economic developments that are often not based on justice. This study uses qualitative methods and a descriptive-analytical approach. Primary data were obtained through interviews with Islamic economic experts and Islamic banking practitioners, and secondary data were obtained from related literature such as books, journals, and Islamic economic articles. Thematic analysis was conducted to identify the application of muamalah principles in various economic sectors. The results of the study indicate that the principles of muamalah have been widely used in Islamic banking, Islamic investment and Islamic e-commerce with a focus on justice, efficiency and transparency. However, there are challenges in implementing these principles, especially related to the prohibition of gharar and riba in the speculative global financial system. This study concludes that the principle of muamalah can be the foundation for a better and more sustainable economic system, if supported by proper education and regulation.

Resilience of Islamic and conventional stocks to geopolitical conflict: A GARCH model analysis

Purpose – This study examines the volatility behavior and resilience of conventional and Islamic stock indices in Indonesia during periods of geopolitical uncertainty, focusing on the Israeli–Palestine conflict.Methodology – This study employs the GARCH(1,1) model to examine the volatility dynamics of four major stock indices: the Jakarta Composite Index (JKSE), LQ45, the Indonesia Sharia Stock Index (JKISSI), and the Jakarta Islamic Index (JII). The analysis covers the period from January 1, 2023, to July 31, 2024, enabling an evaluation of market dynamics before, during, and after the conflict on October 7, 2023.Findings – The results show that conventional indices (JKSE and LQ45) exhibit significant volatility persistence, suggesting a higher susceptibility to prolonged instability during geopolitical tensions. Conversely, the Islamic indices (JKISSI and JII) are more responsive to recent market shocks, indicating greater resilience owing to ethical investment principles that avoid high-risk sectors. Furthermore, this study finds that external macroeconomic factors generally do not significantly influence stock market volatility in Indonesia.Implications – This may be due to the predominance of internal factors and local market dynamics over external global shocks, reflecting the Indonesian market’s less integrated nature in the global financial system. These findings offer valuable insights for investors and policymakers in managing risk and optimizing portfolio strategies amid geopolitical stress.Originality – This study contributes to the growing body of literature on the comparative analysis of conventional and Islamic investments in emerging markets.

THE EFFECT OF IN-GAME ADVERTISING AS A MARKETING TECHNIQUE ON THE PURCHASING BEHAVIOR OF GENERATION Z IN TURKEY

The purpose of this study is to investigate the effect of in-game advertisements, which are a marketing technique, on the purchasing behaviors of Muslim youth and the purchasing behaviors of these youth in Generation Z. The survey of the study was prepared by Betül Başer and Özgün Arda Kuş, a 31-question survey was applied to 250 volunteer students by e-mail after receiving permission from the researchers and receiving approval from the ethics committee. The survey data was uploaded to the SPSS 25 program and the frequencies and percentages of the data were obtained. In the study, analyses were conducted using quantitative research methods such as variance analysis (ANOVA), t-test and Tukey test. According to the results of the research, significant differences were determined among Generation Z according to gender, age and education level. In order to make Islamic production and investments according to new trends, it is necessary to know the characteristics of the generations well and to develop Islamic applications and software suitable for these characteristics. Since Generation Z cares about games and the advertisements they encounter during the game, it is important for Islamic investments and productions to be developed in a way that has Islamic characteristics.

Factors Affecting Muslims' Decision in Tangerang Selatan During Recession to Make Sharia Investment

The pandemic has had a significant impact on the global economy, including Indonesia, which experienced a recession in 2020. However, a unique phenomenon occurs in the Islamic capital market, where Islamic stocks show stability and even experience significant increases during the recession. The study explores how the recession affects the decision of Muslims in Indonesia to invest in Sharia and whether Sharia investment can be an effective solution to deal with a recession. Data from the Central Statistics Agency and the Financial Services Authority shows that the sharia capital market in Indonesia continues to grow, especially in the form of sharia stocks and sharia mutual funds. This study aims to analyze the factors that affect the decision of the Muslim community to make sharia investments during the recession due to the COVID-19 pandemic. This study uses quantitative methods with respondents from various sectors of the Muslim community in Indonesia, including students, office workers, and entrepreneurs. The results of this study found that the decisions of the Muslim community have a significant influence on Islamic investment, with the results of the t-test showing a t-count value of 25.366 and a determination coefficient (R²) of 86.8%. This means that most of the variations in sharia investment can be explained by community decisions, while the remaining 13.2% is influenced by other variables. The conclusion of this study is that increasing Islamic financial literacy and religious understanding can be an effective strategy to encourage interest in Islamic investment in Indonesia. This research is expected to be a reference for financial institutions and policymakers in improving accessibility and education related to Sharia investment.

The Problems of Sharia Investment in Indonesia from The Perspective of Maqashid Al-Sharia

This study examines investment instruments in Indonesia from an islamic perspective, focusing on their compliance with Maqashid Al-Shariah and Islamic capital market regulations. It also explores public preceptions of the halal status of Islamic capital market product. The methodology used is a qualitative approach with a literature review. The study reviews 200 journal articles, selecting 32 relevant journal and 2 books for analysis. The findings show that Islamic investments must adhere to the five key elements of Maqashid Al-Shariah: protection of religion, life, intellect, lineage, and wealth. Investments that fail to meet these criteria may not be considered fully compliant with Shariah, despite legal recognition. Regulations by the OJK and supported by the DSN-MUI provide a sufficient legal framework, but Shariah principles are often blended with conventional ones due to the influence of Pancasila ideology. The study also reveals mixed public opinions regarding the Islamic capital market, with many questioning whether products labeled as "Shariah" truly meet halal and Shariah principles. This skepticism is compounded by the absence of specific laws regulating the Islamic capital market, highlighting a gap between legality and morality. The study emphasizes the need for clearer policies distinguishing between Shariah and conventional principles and the importance of enhancing public literacy on Shariah-compliant investments.

Pengaruh Pemahaman Muamalah dan Sikap Heuristik Terhadap Pengambilan Keputusan Investasi Syariah pada Mahasiswa Universitas Islam Negeri Sumatera Utara (UINSU)

This study aims to examine the effect of muamalah understanding and heuristic attitude on sharia investment decision making among students of the Faculty of Economics and Islamic Business at the State Islamic University of North Sumatra (UINSU). Muamalah understanding refers to the knowledge of Islamic rules governing economic transactions, including the prohibition of riba, gharar, and maisir. Meanwhile, heuristic attitude involves the use of rules of thumb that help simplify the decision-making process, especially in complex and uncertain situations. This study was conducted using a quantitative approach through a survey of 271 students selected using purposive sampling technique. Data was collected through a Google Form-based questionnaire and analysed using multiple linear regression. The results showed that both muamalah understanding and heuristic attitude have a significant positive influence on Islamic investment decision making. Simultaneously, these two variables explain about 67,0% of the variation in Islamic investment decision-making. A deep understanding of muamalah helps students in choosing investments that are in accordance with sharia principles, while heuristic attitude allows them to make decisions more quickly and efficiently even in conditions of limited information.

Nexus between Islamic Investment, Musyarakah Financing, Islamic Microfinance and Achieving SDGs in Indonesia

Islamic Finance Transformation through analysing the role of musyarakah financing and Islamic microfinance in enhancing Islamic investments in Indonesia has become an important focus to achieve the Sustainable Development Goals (SDGs). This study explores the role of Islamic financial instruments in facilitating investments that not only prioritise financial returns but also social and environmental outcomes. The method used is Fully Modified Ordinary Least Squares (FMOLS) to analyse time series data from 2015 to 2023. The research variables used are Islamic investment, musyarakah financing and Islamic microfinance. The results showed that musyarakah financing has a significant influence on the growth of Islamic investment, thus contributing to poverty alleviation (SDG 1) and increasing financial inclusion (SDG 8). In addition, Islamic microfinance is proven to be effective in empowering the local economy and creating jobs. These findings confirm the importance of Islamic finance integration in sustainable development strategies and offer innovative solutions to complex global challenges

The Institutional Innovation Through The Integrated Halal System In Management of Hajj Fund Investment in Indonesia

The presence of the COVID-19 disease has had an impact on the pattern of departures for the pilgrimage throughout the world, especially in Indonesia. The lockdown, PSBB, and PPKM policies have had an impact on reducing mass mobilization in the context of preventing COVID 19. The Hajj ban policy has resulted in a longer waiting list for Hajj departures. The longer the waiting list means that the Hajj funds accumulate and must be managed professionally and transparently. Law No. 34 of 2014 mandates the Hajj Fund Management Agency (BPKH) to manage the collected Hajj funds. Previously, 50% of Hajj funds were placed in Islamic banking, it is planned that in 2021 there will be changes. 30% of funds being placed in Islamic banking and 70% being invested in the Islamic investment sector, which is able to provide optimal returns. Therefore, this article was compiled with the aim of providing analysis and proposals for investment innovations that are Sharia-compliant and able to provide benefits for pilgrims who have already made Hajj payments, namely with an integrated halal system. This goal is achieved by using a literature review with Porter's diamond analysis to see the strength of the halal industry in carrying out institutional integration with BPKH. In addition, institutional analysis is also used to explore institutional patterns that should be carried out to achieve optimal management of Hajj funds. This study concludes that in the management of Hajj funds, strong institutions are needed, specifically those that have established Islamic ethics. The principles of trust and honesty are the main foundation for carrying out a halal-integrated system. In the implementation of Hajj fund investment, integration is needed between BPKH, MUI, Ministry of Industry, BPJPH, and companies that are already halal-certified.

The Impact Of Daftar Efek Syariah (DES) Announcement To The Asii’s Abnormal Returns And Trading Volume

DES announcement can be an important information for investors in making investment decisions. Islamic investors have to sell their stock when their stocks are excluded from DES. On the other hand, investors who want to invest in Islamic stocks will buy stocks that are included in the DES. The purpose of this study is to examine the impact of ASII stock reentry and exit from and into DES to the abnormal return and trading volume activity. This study uses secondary data obtained from investing.com. The data used in this study are daily stock closing prices, IHSG index and daily stock trading volume. This study follows event study methods. The first event window used in this study is 7 days before November,23,2020 and 7 days after. The second event window used is 7 days before May 24, 2023 and 7 days after. Descriptive statistic and Wilxocon sign ranks is used to analysis the data. The results showed that there was no significant difference in abnormal returns both at the time of ASII exit and reentry. However, trading volume of ASII stock significant difference before and after exit announcement. But when ASII stock reentry to the DES there was no significant difference.

Exploring the Role of Social Media @asysyirkah.id in Promoting Sharia Investment among Millennial Investors: A Case Study of Asysyirkah Sharia Cooperative

This research aims to explore the role of social media, particularly the @asysyirkah.id account, in promoting Islamic investment among millennial investors, with a focus on Asy-Syirkah Islamic Cooperative. Using a qualitative approach with a case study design, this research analyses how @asysyirkah.id leverages social media platforms to increase awareness, understanding, and participation in Islamic investment. Data were collected through in-depth interviews with the co-operative's social media manager, observation of social media content, and focus group discussions with co-operative members. Data analysis techniques used thematic analysis techniques. Data validity techniques used triangulation, member checking, and audit trail. The results of this study show that social media is a very effective tool for promoting sharia investment among millennials. The role of @asysyirkah.id media can increase engagement, education, and participation in sharia investment while overcoming existing challenges in content management and interaction

Return versus hype – Are Islamic metaverse companies more profitable than general ones – A Chinese stock analysis

The metaverse, a virtual universe in which individuals and companies can interact, has become of paramount importance in China in recent years. While the metaverses are still in their infancy, there has been a growing interest and influx of capital into these universes. Shariah-compliant corporations have been gradually attracting significant funds from Islamic countries, given the growing strong engagement and trade. Similarly, metaverse corporations have been gaining significant sizes in the Chinese market and have become cornerstones of the investment landscape. For Islamic investors, questions arise whether these new metaverse corporations provide better returns given the massive hype and media attention they have attracted, and whether a portfolio investment into these corporations deliver the benefits promised. The article provides a comparative analysis between Chinese Islamic metaverse and Shariah-compliant enterprises, where all enterprises have either A or H-shares. The performance analysis over a timespan of 10 years demonstrates that the most optimal portfolios have similar expected returns while general Shariah-compliant enterprises provide significantly lower risks as compared to the metaverse ones. This implies that Shariah-compliant enterprises provide significantly more value for the risk they are attributed and are more sustainable.

Perceptions and Knowledge of Sharia Principles in Islamic Investment: Perspective of Muhammadiyah Community

Perceptions and Knowledge of Sharia Principles in Islamic Investment: Perspective of Muhammadiyah Community

Analysis of The Interaction of Monetary Policy and Islamic Investment Towards Indonesia's Economic Growth

Economic growth is the main measure of development success, and the results of economic growth will be enjoyed by the community either by itself or with government intervention. Economic growth is an important indicator in the real sector. The interaction between monetary policy and sharia investment in influencing Indonesia's economic growth is the main focus of this study. This study aims to analyze the effect of the interaction of monetary policy (interest rates, exchange rates and money supply) and the interaction of sharia investment (sukuk, sharia stocks, sharia mutual funds) on Indonesia's economic growth for the period 2000-2022. This type of research is quantitative research using time series data from secondary data with the Vector Error Correction Model (VECM) analysis method with the help of Eviews software. The results of this study indicate that the variables of short-term interest rates, SUKUK, sharia stocks, sharia mutual funds have a positive and significant effect on economic growth, while the rupiah exchange rate (KURS), the amount of money in circulation on economic growth show a negative and insignificant effect. The variables of long-term interest rates, rupiah exchange rates or KURS, the amount of money in circulation SUKUK, sharia stocks, mutual funds have a positive and significant effect on economic growth

Islamic and conventional stocks: Impact of Russia-Ukraine saga on global commodities

Purpose – This study intends to scrutinize the relationship between oil and gold prices on Indonesia’s Islamic stock market before and during the war between Russia and Ukraine, and compare the nature of sharia and conventional stock during the period of study.Methodology – This study uses daily price data of oil price, gold, Islamic index, and LQ45 index. The period spans from 2020 to 2022, which is split into two sub-periods: pre-war and during the war period. Structural vector autoregression (SVAR) was used for data analysis.Findings – This study provided three main findings. First, the Islamic index was found to be more exogenous than conventional stock, implying the safe haven properties of Islamic stock. Second, oil prices have a negative and significant impact on both conventional and Islamic stocks. However, Islamic stocks are less affected by oil price shocks than conventional stocks. Lastly, Gold is a safe haven asset for both Islamic and conventional stocks.Implications – This study is expected to be beneficial for Islamic investors making investment decisions, particularly in the war period, which is still ongoing and more specific for taking advantage of diversification opportunities.Originality – Despite a huge number of studies that investigate the Islamic stock – oil price nexus, this study uncovers the impact of the most recent geopolitical tension during the Russia-Ukraine War.

Enhancing Student Comprehension of Islamic Investment and Capital Market with PJBL Approach

Enhancing Student Comprehension of Islamic Investment and Capital Market with PJBL Approach

Gold characteristics as safe haven and assets diversification for Sharia stocks in Indonesia

Purpose This study aims to determine the role of gold as a safe haven, hedge and asset diversification for Shariah stock in conditions of extreme stock market declines. Design/methodology/approach Quantitative approach is used by applying the threshold generalized autoregressive conditional heteroskedasticity (TGARCH) model to capture bad or good news in the market condition and quantile regression method to obtain the extreme values of stock returns in several market conditions. The data used were the daily closing price of gold and the Jakarta Islamic Index from January 2011 to October 2022. Findings The average conditions show gold does not have a hedge property and only acts as an asset diversification. Second, gold has a substantial, safe haven property in every economic condition. However, the safe-haven property of gold seemed to weaken during the most extreme stock market decline. Thus, although gold appears as a safe haven and asset diversification, it remains a risky investment and only provides a minor role in the face of the extreme stock market period. Practical implications This research provides a discourse and literature for Islamic investors and investor managers to choose the right investment instrument in various economic conditions where gold has a function as diversification and safe haven in their asset portfolio under any other asset portfolio conditions which is also in line with modern portfolio theory. For policymakers, the study can be used as material for consideration in making policies related to the accessibility of gold as an investment instrument. Originality/value This study presents the originality by using the price of Antam gold as a proxy for gold investment during the latest research year data and focusing on case studies in Islamic capital market in Indonesia. Moreover, this research provides quantile regression that sharply discussion in various economics condition.