Exploring Sharia Screening Review in Islamic Capital Market in Indonesia (Jakarta Islamic Index)

Several previous studies on Islamic capital market screening have not conducted an in-depth exploration of Sharia screening on a country's index over different periods. This study aims to examine sharia screening performed on entities registered in the Jakarta Islamic (JII) Index 2015–2019. The study uses a descriptive quantitative approach by analyzing and describing Sharia screening in entities registered in JII. The research results show that the Financial Services Authority has properly screened Sharia law in registered entities according to the established criteria, as evidenced by looking at the qualitative aspects of entities that do not carry out activities that contain elements of usury, gharar, and maysir. Meanwhile, in the quantitative aspect, the entity has tracked the appropriateness between the percentage of interest-based debt of no more than 45 percent and non-halal income of no more than 10 percent. However, the OJK and MUI criteria still show some weaknesses compared to the screening criteria that apply in other countrie

Flexibility and Sharīʿah Compliance of Islamic Financial Contracts: An Evaluative Framework

Although the key distinguishing feature of Islamic finance is compliance with Sharīʿah, there is criticism from various quarters on the Sharīʿah compliance of its products. However, there is no objective way to assess the Sharīʿah compliance of Islamic financial contracts. This article develops a structured framework for analysing Sharīʿah compliance of Islamic financial contracts by deconstructing them and developing principles of evaluation based on concepts from Islamic legal theory. Other than providing a framework to assess Sharīʿah compliance of Islamic financial contracts, this article also alludes to an important issue regarding the contracts’ flexibility. Using concepts from Islamic legal theory, the article classifies different contractual stipulations according to their legal weight, and identifies how legal perspectives on the requirements of compliance can determine the flexibility of contracts. An evaluative framework is used to assess the Sharīʿah compliance of an actual muḍārabah (silent partnership) contract and finds it to be defective

Examining the Performance of Islamic and Conventional Stock Indices: A Comparative Analysis

Islamic indices encompass different fundamental principles to those held by conventional ones, which directs attention onto comparative financial performance. This paper offers a comprehensive performance comparison between Islamic indices and conventional indices, based on four main markets: worldwide, the US, Europe, and Asia-Pacific for the period of 2007 and 2017 through financial ratio comparison and also the CAPM-EGARCH model. The main finding shows that Islamic indices yield higher average returns and lower risks during the 2007-2009 and 2013-2017 periods for all four markets, compared with respective conventional markets. During 2009-2013 period, the comparison proves inconclusive, since Islamic indices demonstrate better performance in European and Asia-Pacific markets, while conventional indices operate at an enhanced level within other markets. Overall, Islamic indices outperformed conventional indices during the global financial crisis period (2007-2009) and the latter post-crisis phase (2013-2017), especially in the European and Asia-Pacific markets

Optimalisasi Portofolio Nilai Saham: Studi Komparasi Kinerja Saham Syariah dan Nonsyariah

The objective of this research is to analyze the comparison of sharia and nonsharia stock performance. The sample is a company listed on the Indonesia Stock Exchange, listing from 2013-2017. The sample consists of nonsharia stock (LQ45) and sharia stock (Jakarta Islamic Index). Sampling method used purposive sampling technique. Data analysis technique used Risk-Adjusted Return Measurement and analyzed by using paired sample T-Test. Based on analysis and discussion, there is no significant differences between portfolio performance of LQ45 and JII, either using Sharpe, Treynor, and Jensen alpha Index. Based on annual data, the performance of JII’s portfolio is better than LQ45 when macroeconomic is depression, while LQ45 portfolio performance is better when macroeconomic is booming. Thus, JII portfolios are more effective used when the economy is depressed, while LQ45 is more effective when the economy is booming

Islamic (Sukuk) vs. Conventional Financing: Analysis of Profitability

Over the last decade, Islamic Financials (Sukuk) emerged as a pioneering capital market instrument. One of the fundamental reasons for the emerging demand of Islamic Financing (Sukuk) includes its adherence to the finance in accordance to the Islamic values, avoiding Riba, which is the generation of money from money such as usury or interest. Sukuk issues have notably proliferated, which fuels the debate regarding the between the conventional and the Islamic finance. To investigate the impact of Islamic and Conventional Financials on shareholders’ wealth, this study takes the profitability ratios (including ROA, ROE, ROCE, and NPM) of 11 companies issuing Islamic Financials and 11 companies issuing Conventional Financials from the period between 2010 and 2015 and compares the profitability of both financials. The findings reveal the Islamic Financials (Sukuk) to be a significantly high source of profitability for a company along with the other clients’ catchy determinants such as religious principles, sharia-compliant instruments, and interest (Riba) free financing

Optimalisasi Portofolio Nilai Saham: Studi Komparasi Kinerja Saham Syariah dan Nonsyariah

The objective of this research is to analyze the comparison of sharia and nonsharia stock performance. The sample is a company listed on the Indonesia Stock Exchange, listing from 2013-2017. The sample consists of nonsharia stock (LQ45) and sharia stock (Jakarta Islamic Index). Sampling method used purposive sampling technique. Data analysis technique used Risk-Adjusted Return Measurement and analyzed by using paired sample T-Test. Based on analysis and discussion, there is no significant differences between portfolio performance of LQ45 and JII, either using Sharpe, Treynor, and Jensen alpha Index. Based on annual data, the performance of JII’s portfolio is better than LQ45 when macroeconomic is depression, while LQ45 portfolio performance is better when macroeconomic is booming. Thus, JII portfolios are more effective used when the economy is depressed, while LQ45 is more effective when the economy is booming

Risk Appetite and Investment Behavior: A Study on Indonesia Muslim Investors

It has been nine years since the Indonesia Stock Exchange established a Syariah Online Trading System (SOTS), but the number of investors using this system is still relatively small compared to the regular investor. Moreover, the number is much smaller than the potential number of sharia financial markets. This study aims to describe Muslim investors' behavior in Indonesia who use the regular stock account instead of the sharia account. We surveyed by using both offline and online questionnaires, whereby the investors ask to compose the imaginary stock portfolios consisting of stocks and their weights. Using a convenience sampling method, we succeeded in interviewing 85 respondents spread across Indonesia. This study shows that the risk appetite of Indonesian Muslim investors is risk-averse, and they consider sharia aspects in their investment decision. Nonetheless, the compliance to sharia varies among them. Hence, Indonesian Muslim investors cannot be seen and treat as a homogenous group.        JEL Classification: G12, G15, G33How to Cite:Firmansyah, E. A., & Andanawari, N. (2020). Risk Appetite and Investment Behavior: A Study on Indonesia Muslim Investors. Etikonomi: Jurnal Ekonomi, 19(2), 287-298. https://doi.org/10.15408/etk.v19i2.16062

Understanding the motivation to invest: a profile analysis of Islamic funds' investors

This paper seeks to provide a preliminary profile analysis of investors of Islamic funds based on their underlying motivation to invest, which at present received little interest in the literature. The experience of faith-based and socially responsible investment clearly reveals the heterogeneity of investors with divergent investment motives, and this is highly likely to be true among Islamic funds’ investors as well. For this purpose, the study surveys Investors of Islamic funds from three fund management companies in Malaysia with a total sample of 451 respondents. The profiling employs a cluster analysis of the respondents using religion, percentage invested in Islamic funds, and four potential motivations to invest. The result shows a possible segmentation of the investors into three groups, with Muslim investors being segmented into two categories, ‘committed’ and ‘pragmatic’ investors, while the third category being the ‘non-Muslim’ investors. The clusters represent a clear distinction between the three groups in terms of their commitment to Shari’ah principles in investment, the importance of earning halal vis-à-vis high returns, and the benefits of diversification between Islamic and conventional funds. The findings provide valuable insights for fund management companies in terms of understanding the different segments of investors and their issues of concerns for better investment services, product innovation and offering, as well as marketing strategies