Islamic equity indices: a focus group discussion

Abstract

Purpose The purpose of this study is to highlight key issues pertaining to making use of Islamic equity indices and proposing possible solutions to address the problems faced in advancement of the concept of Shariah investing (SI) with the aim to advance the discourse on the subject. Design/methodology/approach Online focus group discussion (FGD) was carried out in which ten Islamic finance researchers and analysts belonging to institutions considered as authority on the subject matter participated to share their viewpoints on Islamic equity indices. Content analysis on the collected data of FGD was carried out which has revealed six key themes. Findings Six broader themes were identified based on the analysis of FGD, which includes criteria for constructing Islamic equity indices, utilization of Islamic equity indices for comparison with conventional stock indices, stock market efficiency perspectives, reason for integration of different equity markets, investors’ awareness of SI and future directions of Islamic equity indices. Results of the study indicate that Islamic finance researchers and analysts opined that there is a need for revising the criteria for construction of Islamic equity indices. There are conflicting viewpoints regarding performance and efficiency of Islamic indices in comparison with conventional indices and main reasons for stock market integration are trade liberalization, globalization and other factors. Moreover, there is a need for making investors and other market players aware about the attractiveness of Islamic indices from investing point of view. Originality/value Based on this extensive literature review and as highlighted by Masih et al. (2018) in their recap of literature on Islamic equity indices indicating that there are bulk of empirical studies carried in the past in the domain, however, there is a dearth of theoretical and qualitative studies. Hence, this preliminary qualitative study not only makes theoretical contribution but also deploys FGD, which is rarely used in the similar context, and offers candid views of the participants on key issues pertaining to Islamic equity indices. This lends novelty to this study.

Ramadhan effect towards Nifty Shariah indices in India

“…However, this effect is not present during the month of Ramadan. Hashmi et al (2022) delved into the obstacles linked to the use of Islamic equity indices. They suggested strategies to address the challenges that are impeding the advancement of Shariah investing (SI) principles.…”

“…However, this effect is not present during the month of Ramadan. Hashmi et al. (2022) delved into the obstacles linked to the use of Islamic equity indices.…”

Academic community's investment decision in sharia stock market: The impact of financial literacy

“…introducing the Islamic capital market to educational institutions such as universities through training, seminars, and Islamic capital market schools, as well as holding discussions and group studies as a learning tool (Hashmi, et al, 2022;Astuti et al, 2018;Al-Tamimi & Al Kalli, 2015;Gallery & Gallery, 2010). This tactic has yet to be proven effective in spurring the academic community's interest to start investing.…”