DOES COVID-19 AFFECT SHARIAH COMPLIANT STOCK? EVIDENCE FROM SELECTED OIC COUNTRIES

Zakir Hossen Shaikh; Mohammad Irfan; Naji Mansour Nomran; Joji Abey

doi:10.22437/jiituj.v8i2.33159

Authors

Zakir Hossen Shaikh Kingdom University
Mohammad Irfan Christ University
Naji Mansour Nomran Kingdom University
Joji Abey Kingdom University

DOI:

https://doi.org/10.22437/jiituj.v8i2.33159

Keywords:

Co-integration, Covid-19 cases, Islamic stock market, OIC countries, VECM

Abstract

This study aims to examine the movements of Islamic stock markets in ten selected OIC (Organization of Islamic Cooperation) countries in relation to Covid-19 cases, providing a comprehensive analysis of market behavior during the pandemic. The countries—Saudi Arabia, Pakistan, Bangladesh, Turkey, Indonesia, Oman, Qatar, UAE, Kuwait, and Bahrain—were chosen based on their large Muslim populations. Data was collected over a one-year period from January 1, 2020, to January 31, 2021, analyzing the relationship between Covid-19 cases and Islamic stock market indices. The study employed co-integration tests to identify long-term relationships and the Vector Error Correction Model (VECM) to explore short-run dynamics. The co-integration test results show a significant long-run relationship between Covid-19 cases and Islamic stock markets in most of the selected OIC countries. Specifically, the Shariah indices in Pakistan, Bangladesh, Turkey, Qatar, UAE, Kuwait, and Bahrain have a positive and significant relationship with Covid-19 cases. Conversely, Saudi Arabia, Indonesia, and Oman exhibit a negative long-term relationship with Covid-19 cases, suggesting a different market response. These results suggest that countries with diversified economies, particularly those relying on natural resources such as oil and agriculture, were more resilient during the pandemic. This study provides novel insights into the unique responses of Islamic stock markets in OIC countries during the pandemic, highlighting regional differences in market behavior and recovery. It suggests that despite the global economic downturn, OIC countries present attractive investment opportunities, particularly due to their swift recovery and resource-based economies, offering a robust portfolio for investors during crises.

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Author Biographies

Zakir Hossen Shaikh, Kingdom University

Dr. Zakir Hossen Shaikh is an Assistant Professor, in the Department of Finance and Accounting, College of Business Administration, Kingdom University, Bahrain. Before this, he worked for more than 28 years in the commercial and academic industry. He has published numerous articles in referred journals and presented many papers in various conferences, both local and abroad exclusively in the different areas of Accounting, management, and Islamic Banking and Finance. He has also participated in a variety of seminars, forums, workshops, and international conferences.
He obtained his Ph.D. (Accounting and Finance) from India in 2018. His doctoral thesis explored the entrepreneurial phenomenon from an Islamic perspective and argued for profit and loss sharing (PLS) contracts as viable alternatives to conventional interest-based financing instruments. He has a Bachelor degree in Commerce and holds Master's degree in Commerce, Business Administration & Finance and Control.
He is a member of the following professional bodies: American Accounting Association, Chartered Institute of Islamic Finance Professionals (CIIF), Malaysia; Life membership, Indian Accounting Association; Life membership, Orissa Commerce Association, India and associated with Accounting & Auditing Organization for Islamic Financial Institution (AAOIFI), Bahrain

Mohammad Irfan, Christ University

Dr. Mohammad Irfan is presently working as an Associate Professor at NSB Academy, Business School, Bangalore, India. Prior to joining NSB Academy. He was associated with CMRIT Bangalore, and School of Business, AURO University, Surat, Gujarat for five years. Dr. Irfan holds MBA (Finance and Marketing), M.Com (Account and Law), and M.A. (Eco). He has done his Ph.D. from the Central University of Haryana and qualified UGC-SRF/JRF/NET in Management and UGC-NET in Commerce. Dr. Irfan has also qualified NSEs Certification of Financial Market in Capital Market Model and BSEs Certification of Islamic Finance, Banking and Capital Market. He has authored more than 56 research papers published in Scopus indexed journals including, The Journal of Economic Cooperation and Development (Q2), International Journal of Business Excellence (IJBEX), International Journal of Economics and Management (IJEM), Montenegrin Journal of Economics-(Q2), Indian Journal of Finance (IJF). His citations reached 129+ along with a 6 H-index. Dr. Irfan has published 6 books in Springer, IGI Global Publication (Scopus indexed), and national publishers. He is an editorial board member/reviewer in several national and international journals.

Naji Mansour Nomran, Kingdom University

Dr.Naji Mansour Nomran, serves as an Assistant Professor in Finance & Accounting Department at College of Business Administration, Kingdom University, Kingdom of Bahrain.

Joji Abey, Kingdom University

Dr.Joji Abey, serves as an Assistant Professor in Finance & Accounting Department at College of Business Administration, Kingdom University, Kingdom of Bahrain. With nineteen years of teaching experience at higher education level, in which Seventeen years in the Kingdom of Bahrain. Dr.Abey holds the prestigious Chartered Manager designation from the Chartered Management Institute (CMI), UK. This designation represents professional recognition and is the highest status that can be achieved in the Management and leadership profession. She achieved the status of Fellow of Higher Education Academy (HEA) in recognition of attainment against the UK Professional Standards Framework for teaching and learning support in higher education. She published articles in national, Scopus-indexed journals and presented papers and participated in various international seminars and conferences.

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