Religious Investor Sentiment, Shariah Compliance Impact, and Theological Risk: Evidence from Bursa Malaysia
This study examines the financial implications of religious restrictions by analyzing how changes in the Shariah compliance status of stocks affect their price and trading volume. Employing the market model in an event study approach and using data from Malaysian firms between 2000 and 2016, the stu...
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| Format: | Article |
| Language: | English |
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İLKE İlim Kültür Eğitim Vakfı
2024-08-01
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| Series: | Türkiye İslam İktisadı Dergisi |
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| Online Access: | https://tujise.org/uploads/2024/08/3_MuratYa%C5%9F_tujise_11-2.pdf |
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| _version_ | 1832542973933387776 |
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| author | Murat Yaş Mohamed Eskandar Shah Mohd Rasid Ahmet Faruk Aysan Saad Azmat |
| author_facet | Murat Yaş Mohamed Eskandar Shah Mohd Rasid Ahmet Faruk Aysan Saad Azmat |
| author_sort | Murat Yaş |
| collection | DOAJ |
| description | This study examines the financial implications of religious restrictions by analyzing how changes in the Shariah compliance status of stocks affect their price and trading volume. Employing the market model in an event study approach and using data from Malaysian firms between 2000 and 2016, the study focuses on 30 announcements from the Security Commission Malaysia’s List of Shariah Compliant Securities (LSCS), resulting in 370 additions and 284 deletions from the compliance list. The findings indicate that the inclusion of stocks in the compliance list generates longterm demand driven by Islamic institutional and Muslim retail investors, leading to a permanent increase in abnormal returns and trading volume. Conversely, the removal of stocks from the compliance list induces short-term negative abnormal returns and increased trading volume, reflecting selling pressure. These results contribute to understanding the financial consequences of religious restrictions, highlighting the influence of Shariah compliance on stock market performance and investor behaviour. |
| format | Article |
| id | doaj-art-afde1a17b903417b81770288299b29e9 |
| institution | Kabale University |
| issn | 2148-3809 |
| language | English |
| publishDate | 2024-08-01 |
| publisher | İLKE İlim Kültür Eğitim Vakfı |
| record_format | Article |
| series | Türkiye İslam İktisadı Dergisi |
| spelling | doaj-art-afde1a17b903417b81770288299b29e92025-02-03T12:01:38ZengİLKE İlim Kültür Eğitim VakfıTürkiye İslam İktisadı Dergisi2148-38092024-08-01112385810.26414/A4071Religious Investor Sentiment, Shariah Compliance Impact, and Theological Risk: Evidence from Bursa MalaysiaMurat Yaş0https://orcid.org/0000-0002-2282-6423Mohamed Eskandar Shah Mohd Rasid1https://orcid.org/0000-0002-7058-9362Ahmet Faruk Aysan2https://orcid.org/0000-0001-7363-0116Saad Azmat3https://orcid.org/0000-0001-6199-7543Marmara UniversityHamad Bin Khalifa UniversityHamad Bin Khalifa UniversityLahore UniversityThis study examines the financial implications of religious restrictions by analyzing how changes in the Shariah compliance status of stocks affect their price and trading volume. Employing the market model in an event study approach and using data from Malaysian firms between 2000 and 2016, the study focuses on 30 announcements from the Security Commission Malaysia’s List of Shariah Compliant Securities (LSCS), resulting in 370 additions and 284 deletions from the compliance list. The findings indicate that the inclusion of stocks in the compliance list generates longterm demand driven by Islamic institutional and Muslim retail investors, leading to a permanent increase in abnormal returns and trading volume. Conversely, the removal of stocks from the compliance list induces short-term negative abnormal returns and increased trading volume, reflecting selling pressure. These results contribute to understanding the financial consequences of religious restrictions, highlighting the influence of Shariah compliance on stock market performance and investor behaviour.https://tujise.org/uploads/2024/08/3_MuratYa%C5%9F_tujise_11-2.pdfislamic financeshariah compliant stockislamic stockindex effectmalaysia |
| spellingShingle | Murat Yaş Mohamed Eskandar Shah Mohd Rasid Ahmet Faruk Aysan Saad Azmat Religious Investor Sentiment, Shariah Compliance Impact, and Theological Risk: Evidence from Bursa Malaysia Türkiye İslam İktisadı Dergisi islamic finance shariah compliant stock islamic stock index effect malaysia |
| title | Religious Investor Sentiment, Shariah Compliance Impact, and Theological Risk: Evidence from Bursa Malaysia |
| title_full | Religious Investor Sentiment, Shariah Compliance Impact, and Theological Risk: Evidence from Bursa Malaysia |
| title_fullStr | Religious Investor Sentiment, Shariah Compliance Impact, and Theological Risk: Evidence from Bursa Malaysia |
| title_full_unstemmed | Religious Investor Sentiment, Shariah Compliance Impact, and Theological Risk: Evidence from Bursa Malaysia |
| title_short | Religious Investor Sentiment, Shariah Compliance Impact, and Theological Risk: Evidence from Bursa Malaysia |
| title_sort | religious investor sentiment shariah compliance impact and theological risk evidence from bursa malaysia |
| topic | islamic finance shariah compliant stock islamic stock index effect malaysia |
| url | https://tujise.org/uploads/2024/08/3_MuratYa%C5%9F_tujise_11-2.pdf |
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