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All Journal El-Barka: Journal of Islamic Economics and Business
Ali Muhtar Muhammad
Universitas Darussalam Gontor
Economics, Econometrics & Finance Social Sciences

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Net Foreign Buying, Global Equity Markets and The Indonesia Sharia Stock Index: An Ardl Analysis Hartomi Maulana; Ali Muhtar Muhammad; M. Kurnia Rahman Abadi; Andika Rendra Bimantara
El Barka Journal of Islamic Economics and Business
Publisher : El Barka

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.21154/elbarka.v9i2.15056

Abstract

This study examines how net foreign buy and global capital market indices affect the Indonesia Sharia Stock Index (ISSI). Research Methods: The study uses monthly secondary data for 2019--2024 obtained from the Indonesia Stock Exchange (IDX), the Financial Services Authority (OJK), Bank Indonesia and international financial databases. The data are analysed with the Autoregressive Distributed Lag (ARDL) model and its error correction form. Results and Discussion: Net foreign buy has no significant contemporaneous effect on the ISSI in the short run, although its third lag is negative and significant; in the long run, its effect is positive and significant. Global capital market indices have a positive and significant effect on the ISSI in both the short and the long run. The error correction term (−0.153; p \< 0.01) shows that about 15% of any deviation from the long-run equilibrium is corrected each month. Conclusion: Investors should incorporate global capital market indicators into their investment decisions and portfolio risk management. Regulators need to strengthen the resilience of Indonesia's Islamic capital market against global financial shocks and broaden its domestic investor base.
Co-Authors Andika Rendra Bimantara Hartomi Maulana M. Kurnia Rahman Abadi