The Impact of Macroeconomic Variables on Islamic Stocks Market Performance in Malaysia
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Universiti Malaysia Sarawak (UNIMAS)
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This study investigates the relationship between macroeconomic variables and Islamic stocks market performance in Malaysia, specifically focusing on the FTSE Bursa Malaysia Hijrah Shariah Index. By examining the impact of key variables, including interest rates, inflation, gross domestic product (GDP), and foreign direct investment (FDI), the research aims to bridge gaps in understanding how these factors influence Shariah-compliant stocks. This study employs a quantitative approach using 15 years of quarterly data (2009 to 2023), with 60 observations. The Autoregressive Distributed Lag (ARDL) model is adopted to analyze both short and long-term relationships, supported by diagnostic tests to ensure data validity and reliability. The results reveal that GDP has a statistically significant negative impact on Islamic stock market performance in both the short and long term. In contrast, interest rates, inflation, and FDI are found to have no significant impact on Islamic stock performance. These findings provide valuable insights for investors, policymakers, and stakeholders in the Islamic finance industry, contributing to more informed decision-making and supporting efforts to enhance the resilience of Malaysia’s Islamic capital market.