Macroeconomic Determinants of Jakarta Islamic Index
Abstract
Jakarta Islamic Index is used as a benchmark to measure the performance of an investment in Islamic compliance stocks. The performance of this index determines investor’s confidence to develop an investment in sharia equity. This study aims to analyse the influence of macroeconomic indicators consisting of country risk, sharia bank certificates, inflation, exchange rate, and oil prices to Jakarta Islamic Index. The research uses quantitative approach with multiple regression analysis in EViews to help reach the goal. Empirical results show that, independent variables consisting of composite risk, sharia bank certificate, inflation, exchange rate, and oil price simultaneously influence the Jakarta Islamic Index with a significance rate and coefficient determination of 47.55%. Inflation shows no significant and major role in determining Jakarta Islamic Index, while country risk, sharia bank certificate, exchange rate, and oil price influence significantly the dependent variable.
Keywords: JII, Islamic Index, Country Risk, Sharia Bank Certificates, Inflation, Exchange rate, oil price.
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