Muslim Investors Research Articles

KEBERADAAN GALERI INVESTASI DALAM MENINGKATKAN ANIMO MASYARAKAT MUSLIM UNTUK BERINVESTASI PADA PASAR MODAL SYARIAH DI KOTA MATARAM

This study aims to determine the effectiveness of the investment gallery in increasing the interest of Muslim communities to invest in the Islamic capital market in Mataram. This study uses qualitative research that describes the actual phenomena and conditions based on field findings that are presented using descriptive data in the form of information. The result of the study indicates that the presence of investment galleries in the tertiary institutions has not been able to attract the interest of Muslim communities outside the campus to invest in the Islamic capital market. Data collected from Phintraco securities working with investment galleries shows that the growth of syariah capital market in the UIN mataram as of July 2019 is only 33% which is dominated by lecturers and students of the UIN Mataram, and there were no Muslim investors from the outside campus. Similar finding in the University of Mataram shows that investment gallery growth of opening Islamic accounts is only 1% compared to regular accounts ( 55% -60% ) which also dominated by lecturers and students of the Faculty of Economics and Business, University of Mataram and there are no Muslim investors from communities outside university.

TINGKAT PERMINTAAN SUKUK RITEL: ANALISIS FAKTOR INTERNAL DAN EKSTERNAL

Sukuk is one of the investment instruments that attract Muslim investors who want to invest in accordance with sharia principles. The demand for sukuk is relatively high every time a sukuk is issued. The study aims to examine the factors influencing the demand of retail sukuk issued by government. Independent variables consist of sukuk price, BI rate, inflation rate and rate of return of Mudharaba investment accounts. Retail sukuk SR-005 is choosen as dependent variable because of the highest average investment per investor during ten years of retail sukuk issuance. The data is taken from February 2013 to February 2016 and analysed using panel data regression. The results indicate that BI rate has negative influence on the demand of retail sukuk SR-005 while sukuk price, inflation rate and rate of return of mudharaba investment accounts do not influence the demand of retail sukuk SR-005. This study is expected to contribute to the scientific development of Islamic finance, especially the study of sukuk.

Pengaruh Pengetahuan Santri pada Produk Reksadana Syariah terhadap Minat Santri Berinvestasi Direksadana (Studi Kasus Mahasantri Pondok Pesantren Sunan Drajat Lamongan Jawa Timur)

This research is motivated by the rapid and dynamic development of the capital market investment world. One of the capital market products that is widely known by the public is mutual funds. In the development of mutual funds, there have been sharia mutual funds that provide broad investment alternatives, especially for Muslim investors. but based on the facts, behind the hustle and bustle of mutual fund investment activities in the world, only a few students of the Sunan Drajat Islamic Boarding School have invested in mutual funds. There are several factors that cause students to have no interest in investing through sharia mutual funds. Among several existing factors, researchers are more interested in examining the knowledge of students about sharia mutual funds. The purpose of this study is to determine whether or not there is an influence of knowledge of students at the Sunan Drajat Islamic Boarding School on sharia mutual funds products can affect students' interest in investing in mutual funds. The sampling technique used in this study is Convinience Sampling with a population of students of the Sunan Drajat Islamic Boarding School.. Data collection using a questionnaire instrument. Testing the instrument using the validity test and reliability test through the computer program SPSS version 16.0. Test assumptions using normality test and linearity test. The data analysis technique used is a simple linear regression test. The assumption test in this study uses the t test and the coefficient of determination. Based on the results of a simple linear regression test, the t-count value is 9.768 which exceeds the t-table value of 2.011, which means that students' knowledge of Islamic mutual funds products has an effect on students' interest in investing in mutual funds. The results of the coefficient of determination test obtained an R value of 0.816 and an R Square of 0.665, which means that students' knowledge of Islamic mutual funds products has an effect of 66.5% on students' interest in investing in mutual funds. The remaining 33.5% is influenced by other variables.

Islamic Versus Conventional Stock Market Indices Performance: Empirical Evidence from Turkey

<p><em>Rapid growth of Islamic finance in general and Sharī`ah compliant stocks in particular arises the question whether Islamic funds/stocks have a better performance or there is no significant difference with the performance of conventional counterparts. This study has twofold objectives, firstly to compare the performance of Islamic and conventional stock market indices in Turkey, namely KATILIM50 and BIST 100 by using Two-Sample Test of Hypothesis over the period of 15 May 2015 to 31 December 2016. Secondly, to examine the causal relationship between both stocks markets indices in the short-run using </em><em>Granger (1969) Causality Test</em><em>. The findings of parametric Z-test reveals that there is no statistical significant difference between the performance of both indices the KATILIM 50 index and BIST 100 index in Turkey Stock Exchange Market during the time frame of the study. Further, the </em><em>Granger</em><em> Causality findings indicate the absence of causal relationship between the two stock markets indices in the short-run.</em> <em>This suggests that stock markets in Turkey are informationally efficient and non-violated with the Efficient Market Hypothesis with respect to the available information of both indices. The findings of this study therefore will provide useful channel for Muslim investors to fully participate in the Turkish capital market that is Sharī`ah complaint and fulfil their religious belief without sacrificing any financial performance.</em></p>

Pengungkapan Islamic Social Reporting pada Perusahaan di Jakarta Islamic Index

Islamic Social Reporting (ISR) is a benchmark for reporting Islamic-based social performance to companies. However, the development of ISR is currently not growing rapidly in Indonesia because there are no regulations that regulate sharia social responsibility reporting standards. Increased disclosure of Islamic social performance is expected to influence the decisions of muslim investors in choosing sharia shares in companies listed in the Jakarta Islamic Index. This study aims to analyze corporate social responsibility (CSR) disclosures in sharia and the factors that influence them. The data used are annual reports of companies registered in JII from 2012 to 2015, 14 of which were selected from 30 companies. The method used in this study is panel data regression with the fixed effect model (FEM) approach. The results of the analysis show that of the five variables that allegedly influence the level of ISR disclosure, three variables, namely company size have a positive effect, firm age and leverage have a significant negative effect on ISR disclosure. The other two variables, namely the number of board of commissioners and profitability have no effect on ISR disclosure.

Does Shariah Indices Converge Evidence from Gulf Cooperation Council (GCC) Countries

S&P Dow Jones Indices are celebrating the 10th anniversary in Dubai with the expansion of single and multi factor index series in Gulf Cooperation Council (GCC) region. This current set of indices covers low volatility, momentum, enhance value, and equality factors. The objective of the study is to understand the dynamic relationship between domestic Shariah Indices of GCC nations which is important for investors to mitigate their risk and for governments to take precautionary action to avoid the possible financial downturn in their respective countries. The study has uni-directional Granger causality between Bahrain to Qatar, Oman, Saudi Arabia and UAE and bi-directional Granger causality between Saudi Arabia to Kuwait and Oman. This study will not only be advantageous for the Muslim investors, but also the other investors too. This important information enables the investors to adjust their financial portfolio, and also helps the respective market regulator.

The Concept of Islamic Banking from the Islamic Worldview

Islamic banks are required to run their business activity with full conformity to Shariah. They should not borrow money on interest nor keep their surplus cash in interest bearing account as well as should not involve in any prohibited business deals. Even if the business activities are permissible, the borrowings may be based on riba (usury), the surplus is kept in interest bearing accounts and so on. Hence, this article aims to offer an alternative to liberate Muslim investors and small managers from the sinful action of dealing with those banking business activities.

Determination of Muslim Investor Behavior in Investing in Indonesian Capital Markets through Investor Intention

Determination of Muslim Investor Behavior in Investing in Indonesian Capital Markets through Investor Intention

The U.S. Economy, Public Policies, and the Dollar as an International Currency Reserve

The “innocent” outsourcing, the creeping globalization, and the “guilty” latest global financial crisis have caused serious and lasting socio-economic problems to the U.S. The current account deficit (consumption exceeds production in the U.S.), which causes a capital account surplus (capital inflows in the U.S.) and the scale of financing needed to support the U.S. fiscal deficit (and the private sectors and households debts) together with the Federal Reserve’s policy of keeping U.S. interest rates low for ten years to ward off deflation, to stimulate the financial markets, and to revive growth, has revived concerns about a sudden and sharp depreciation of the U.S. dollar, an increase in inflation, and a new burst of the current bubble in the financial market, which will cause a global depression. Americans have lost an enormous amount of their purchasing power and wealth during the last 90 years, due to seven financial crises. The wars in Iraq, Afghanistan, Syria, and Libya have turned Muslim investors to other currencies holdings instead of the U.S. dollar. This article examines potential triggers and indicators of such a crisis and posits concrete policy options to limit U.S. vulnerability, due to loss of manufacturing and to the possibility of a plummeting dollar. But, even with a depreciated dollar, the U.S. economy cannot compete with the Chinese one because the cost of production in China is less than 1/10 of the U.S. cost. U.S. has to maximize the social welfare of the country, which means to protect its domestic industries and sectors of the economy. It argues that the obvious long-term response to the risk of a dollar crisis and deterioration of the U.S. welfare is to limit buildup of the United States’ external debt (trade deficits) and domestic ones (public and private debts), and recommends that larger reserves (and well-understood mechanisms for borrowing foreign exchange reserves from major foreign central banks) would help to reduce the United States’ vulnerability to such a crisis. As a debtor, the U.S. is benefited from the devaluation of its currency and from the protection of its domestic manufacturing.

Forecasting Islamic Stock Market Volatility: An Empirical Evidence from Pakistan Economy

Islamic investment particularly, in stocks has revealed an incredible growth in the 21st century. The growing demand of Islamic finance in Pakistan has asserted the main controllers of stock market to launch Islamic index for assisting investors in buying and selling of shares in alignment to their religious beliefs. Though Pakistan is deficient in having a proper Islamic stock market but Al-Meezan and Karachi Stock Exchange has initiated an Islamic stock market by the name of Karachi stock exchange Meezan index (KMI-30). This study uses time series analysis for the forecasting of Islamic stock index of Pakistan under the influence of volatility. The daily data of KMI-30 of five days per week starting from 1st September 2008 to 3rd May 2012 is taken. The output reveal that Muslim investors can earn substantial revenues by investing in Islamic stock indices and can also achieve their peace of mind by aligning their investments to their religious values. The results of Box-Jenkins methodology show that ARIMA model with the value of (2, 1, 0) and Generalized Autoregressive Conditional Heteroskedasticity shows that GARCH with the value of (1, 1) are the best models for forecasting of KMI-30 in Pakistan. Hence, the study assists policy makers, practitioners and investors who desire to make alignment in their financial investment and religious values.

Shari'ah Screening Methodology : New Shari'ah Compliant Approach

The purpose of this paper is to address to a long-standing criticism of the various Shari’ah screening methodologies implemented by Islamic index providers. This study aims to provide evidences derived from the Islamic sources (Qur’an and Sunnah) and offers a potential solution for the harmonization of Shari’ah screening methodologies. Strong evidences from the Qur’an reveal that the most righteous and fair judgment is provided when the only factors that are considered are the entirely endogenous factors. This study further emphasizes the importance of using a screening methodology that supports the main notions of Islamic finance as a whole, and adheres to the essence of the ayah (Al-Baqarah: 275). This study exhibits a potential towards the harmonization of Shari’ah screening methodologies which encourages the participation of Muslim investors by ensuring better awareness and confidence regarding stock investments. This paper fulfils an identified need to study how Shari’ah screening methodologies can be derived from the Islamic sources yet is based on “out-of-the-box” thinking.

Carving a service quality niche for Sukuk: a case study of National Bonds in the UAE

Sukuk products have come to position themselves prominently on the landscape of capital markets. Available evidence indicates that primary Sukuk issuances reached $100 billion in 2017 compared with $88.28 billion in 2016. This figure is likely to reach $200 billion in 2018 (Thomson and Reuters, 2016; S&P Global, 2018). It is also remarkable that Sukuk market has been patronised by both Muslim and non-Muslim investors. In view of the great potential of Sukuk, National Bonds Corporation PJSC (National Bonds), a private joint stock shareholding company in the UAE, has created the National Bonds Sukuk Trading Platform to meet the needs of its customers. Our paper tests the effectiveness of the platform in terms of service quality through an empirical exercise in the UAE. The paper, we hope, would have interesting implications for decision making.

Investment technologies оf Islamic banks and prospects for the development of an interest-free banking sector in Russia

The global financial crisis of 2008-2009 catalyzed a redefining of the basics of the conventional financial model and sought opportunities for its ethical reset. In this regard, investment banking technologies are becoming increasingly important. Nowadays Full Fledged Islamic Banks with their inherent refusal to charge and pay interest and conduct speculative operations influence a new trend in investment banking. Islamic banking offers the solutions to attract alternative sources of finance without making financial policies of countries directly dependent on the cost of credit funds and generates new opportunities for investors. The investment activities of Islamic banks are considered to be one of the most efficient instruments to ensure financial stability and sustainable economic development. Apart from pooling the assets of Muslim investors, Islamic banking mobilizes their spiritual potential. However, in Russian jurisprudence Islamic banking remains an understudied and poorly understood phenomenon. This article addresses the core aspects of Islamic law, prohibitive imperatives and moral compass of Islamic banks. Special attention is paid to the concept of justice in Islamic banking, as well as condemnation of usury in the Christian tradition. In conclusion, the authors propose to adopt the law on investment and trust banking to establish two financial sectors in Russia: interest-bearing and interest-free, and distinguish credit (conventional) commercial banks involved in accustomed usury banking from commercial banks focused on non-usury banking based on the pattern of Islamic banks. In order to establish commercial banks of a new type, the civil concept of trust should be borrowed.

Pengaruh Return On Equity, Earning Per Share, dan Debt to Equity Ratio Terhadap Return Saham (Studi Pada Emiten Saham Syariah Sektor Properti dan Real Estate Yang Terdaftar di ISSI Tahun (2013-2015)

Islamic stocks is one of the most preffered investment type by Muslim investors. In the decision making process, the investors have to consider the financial reports and stock analysis. This research aim to investigate the effect of fundamental performance toward stock return property and real estate registered in ISSI in 2013 - 2015. Dependent variable is stock return and the independent variable are Return on Equity, Earning per Share, and Debt to Equity Ratio.The research used quantitative approach using secondary data. This research used panel data regression method.This research collecting data from the annual report from 2013 to 2015. This research used a significance level of 5%.Based on the regression analysis result, it indicate that ROE does not have significant effect to the stock returns. EPS and DER have significant effect to the stock returns. Simultaneously, ROE, EPS and DER have significant effect to the stock returns.

Islamic religiosity and portfolio allocation: the Malaysian context

PurposeThis study aims to investigate the association between Muslim individuals’ portfolio allocation choice and Islamic religiosity (levels and dimensions), controlling for risk tolerance and sociodemographic factors.Design/methodology/approachThe study uses primary data collected via survey questionnaires from a sample of 751 Muslim working individuals in Kuala Lumpur, Malaysia. Owing to the ordinal nature of the dependent variable, which reflects the levels of proportions of risky assets in portfolios, the data were analyzed using an ordered probit regression model.FindingsThe findings reveal that Islamic religiosity levels in general were insignificantly related to portfolio allocation, but that two dimensions of religiosity (virtue and obligation) significantly impact the allocations of risky assets in the portfolio. The higher the level of virtue, the lower the propensity to allocate risky assets into the portfolio. On the contrary, the higher the level of obligation, the higher the propensity to allocate risky assets in the portfolio. Meanwhile, individuals with higher risk tolerance, income and education levels show greater propensity to allocate risky assets in the portfolio.Research limitations/implicationsThe sample is restricted to Muslims in Kuala Lumpur; hence, the findings are not easily generalized to Muslim investors in general. Findings may differ between Muslims across the world, so future research needs to expand from a country specific to an international analysis. In addition, future studies could include other determinants of portfolio allocation, such as financial literacy.Practical implicationsThe findings of this study may assist financial planners and policymakers to better understand the drivers of portfolio allocation among their Muslim clients.Originality/valueWhile other studies have tended to focus on the impact of religiosity on the holdings of specific financial assets, such as Islamic bank accounts or Takaful, the present study explores the effect of Islamic religiosity dimensions on the allocations of risky assets in the portfolio. The study also develops an ordinal measure of portfolio allocation and makes a methodological contribution by using an ordered probit regression analysis.

What is the cost of faith? An empirical investigation of Islamic purification

Based on the Qur'anic prohibition against interest (riba), this paper quantifies the true cost of purification for the first time. The extant literature focuses on the performance of various Islamic portfolios but the returns of these funds are pre-purification. This is a significant oversight given that, for some scholars, the entire permissibility of the industry rests on purification. By comparing the impact on returns of three purification methodologies we show that purification adversely and statistically significantly impacts portfolio returns and that the choice of purification methodology also matters. Our results are robust to alternative portfolio construction methodologies and standardised tax rates. The implications are that purification is not a trivial matter for compliant Muslim investors — comprehensive shari'ah compliance has a significant faith and financial implications for compliant Muslim investors such that it could be argued that, by ignoring the impact of purification on returns, the findings of the extant literature are incomplete.

THE IMPACT OF RELIGIOUSITY TO PREFERENCES OF MUSLIM ‘S INVESTOR IN CAPITAL MARKET

The current study aims at knowing know how far a religiosity affects a person’s behavior in the capital market. This qualitative research uses the religiosity theory constructed by Glork and Start . These results from the interview to 3 investors as the subjects of the research shows that the religiosity of Muslim investors in Pekalongan is not automatically guarantee their invesment behaviors. This research support the previous research conclusion that religiousity not automaticaly conducted muslim investment behavior in banking and finance. On the other hand there are some research have different conclusion.

Impact of ethical screening on risk and returns

Purpose This paper aims to expand the literature on performance and volatility of Islamic funds and indices in comparison to their conventional unscreened counterparts, by studying the Moroccan case considering the recent introduction of Islamic finance in the country toward the end of 2015. Design/methodology/approach As there are still no Shariah-compliant indices in Morocco, the authors first applied four Shariah screening methodologies of some of the world leading equity index providers (i.e. Dow Jones, FTSE, S&P and MSCI) to screen the public listed companies in Casablanca Stock Exchange for Shariah compliance. Next, the authors constructed four Islamic float-weighted indexes for which they modeled the dynamic volatility using an extension of the AutoRegressive Conditional Heteroskedasticity models, namely, EGARCH(1,1). Findings The findings show that the screening process resulted in a well-diversified universe of Shariah-compliant stocks (25.6 per cent) to invest in. Furthermore, it is found that constructed Islamic indices outperformed the broad-based Moroccan All Shares Index (MASI) during the considered period of analysis (January 2013 to December 2014), and their long-run volatility is higher. This indicates that investors in Shariah-compliant stocks do not sacrifice financial performance for their risky investment. The estimates of the model show that volatility for the MASI is more persistent and takes longer time to die, and the leverage effect is positive for all indices, meaning that volatility of indexes’ returns is influenced more by good news than bad news, a result that is in contrast to other studies for developed countries. Practical implications On the arrival of the new banking law that introduced Islamic finance for the first time in Morocco, the authors suppose that these results could be very helpful for the Moroccan financial authorities in consideration with the construction of Islamic equity indices for Muslim investors seeking to invest ethically in accordance to their religious convictions but also for index funds managers and other equity market players. Originality/value The present study is the first of its kind in Morocco to construct Islamic indices using Shariah screening methodologies for which the volatility is modeled using an EGARCH(1,1) dynamic volatility model.

Taxation Treatment Of Islamic Finance Products In Australia

In October 2010, the Board of Taxation released a Discussion Paper titled Review of the Taxation Treatment of Islamic Finance. Since the release of this Discussion Paper, there has been no legislative reform in Australia to accommodate Islamic finance products. In the Discussion Paper, the Board reviews the taxation treatment of Islamic finance products, such as murābaḥa. Murābaḥa is known as ‘cost plus profit financing’ and involves the sale of a commodity by a financial intermediary to a purchaser at a cost plus mark-up profit rate. The Board argues that in order for a murābaḥa product to be treated equally to a conventional product for Australian taxation purposes, the profit mark-up component common to murābaḥa transactions must be treated as if it were interest. However, the Board does not consider the implications for Muslims if the murābaḥa profit mark-up is treated as interest. The objective of this article is to investigate the following two questions: can murābaḥa be viewed as Sharīʿa-compliant by Muslims if mark-up is treated as if it were interest; and, if murābaḥa is viewed by Muslims as no longer Sharīʿa-compliant, could this cause Australia to become less attractive for Muslim investors? This article will undertake a comparative analysis by examining the implications of treating murābaḥa mark-up as if it were interest from various Australian and UK perspectives. This article argues that before legislative amendments are introduced to cater for Islamic finance products, further research is needed on the Sharīʿa-compliant nature of Islamic finance products such as murābaḥa.

Perilaku Investor Muslim Dalam Bertransaksi Saham di Pasar Modal

This research aims to know the muslim investor behavior in a stock transaction in capital market. This research used the qualitative approach, using the case study method by basing on the theory of behavioral finance.Data collection using a purposive sampling technique to determine informants amounted to five muslim investors who at least has a two year stock transaction to be interviewed in depth, observed and evaluated the data by performing a triangulation.The results of this research have findings that muslim investor behavior in a stock transaction is divided into two point of view that is, investors who consider religion in their investment decisions and the invetor did not consider religion in their investment decisions. Investors who consider religion in their investment decisions preferring stock composition of the incoming Sharia index list and nature of investments tend to be long term. Investors who do not consider religion in choosing his investment decision stock blends well in the Shariahcompliantindex or not. The nature of investment investors who did not consider the shortterm nature of the religion.