This paper is aimed to explore the co-movement capital market in Southeast Asia and analysis the correlation of conventional and Islamic Index in the regional and global equity. This research become necessary to represent the risk on the capital market and measure market performance, as investor considers the volatility before investing. The time series daily data use from April 2012 to April 2020 both conventional and Islamic stock index in Malaysia and Indonesia. This paper examines the dynamics of conditional volatilities and correlations between those markets by using Multivariate Generalized Autoregressive Conditional Heteroscedasticity (MGARCH). Our result shows that conventional or composite index in Malaysia less volatile than Islamic, but on the other hand, both drive correlation movement. The other output captures that Islamic Index in Indonesian capital market more gradual volatilities than the Composite Index that tends to be low in risk so that investors intend to keep the shares. Generally, the result shows a correlation in each country for conventional and the Islamic index. However, Internationally Indonesia and Malaysia composite and Islamic is low correlated. Regionally Indonesia's indices movement looks to be more correlated and it's similar to Malaysian Capital Market counterparts. In the global market distress condition, the diversification portfolio between Indonesia and Malaysia does not give many benefits.

This paper investigates (i) the volatility of Indonesian Islamic, SRI, and Conventional equities, (ii) their serial correlation, and (iii) their dynamic correlation and relationship during the COVID-19 pandemic. Using MGARCH-DCC, our findings suggest that the Islamic index is most volatile but performs more efficiently than the others and exhibits no co-movement with Conventional and SRI during the Pandemic crisis. The study empirically shows the resilience and efficiency of the Islamic stocks in Indonesia during the Pandemic. These findings provide valuable and practical recommendations on portfolio diversification for investors and offers policy implications for regulators interesting in and dealing with impact or responsible investing.

Thispaper examines the lag effect of interest payments on the national output represented by GDP. The lag effectimplies the observation of hyperbolic discounting in the fiscal policy. The idea is round-eyed;that the government takes on high debts to finance their spending while not factoring or placing less importanceon the cost of the interest payments. The concept of hyperbolic discounting of behavioral economics is used in this paper to explain this phenomenon in the present path of public policy which operates under an interest-based system. We conduct this analysis by examiningthe present fiscal model and its effect on the economy, wherein debt is preferredin fiscal policy framework.It appears from the findings that the trend in Malaysia’s fiscal policy shows the presence of hyperbolic discounting.Shifting the debt burden to future governments and spending above revenue capacity can be seen as a manifestation of the common pool problem. Two main policy recommendations can be made. Firstly, the fiscal policy structure has to move away from the current interest-based borrowing. This is because an intrinsic feature of the interest-based system is that the risks of a debt transaction are transferred from the lender to the borrower.Secondly, the current tax structure can be simplied to improve tax compliance so as to improve tax revenue collection.Both the above policy recommendations have the potential of reducing the effect of hyperbolic discounting. The first increases the interaction between the government and the public thus enhances the governance structure of the government. The government will have to be more transparent in its dealing as the public has a vested interest in the development projects. The second enhances the first effect by providing a potential increase in tax revenue which will reduce the stress on debt servicing and the need for borrowing.

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