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Volume 17
Issue 2
Online publication date 2017-07-10
Title Financial crisis and segmentation of Islamic stock market
Author Bakri Abdul Karim, Zulkefly Abdul Karim
Abstract
This paper examines the impact of global financial crisis on the Malaysian Islamic stock market integration with the world. We use the International Capital Asset Pricing Model (ICAPM) and moving average to derive the integration index. The results show that the degree of market integration is time-varying. We found evidence that during the crisis, the Malaysian Islamic stock market was obviously segmented from the world market. Therefore the Malaysian Islamic stock market provides opportunity for the potential benefits from international portfolio diversification during the crisis. The prohibition of riba (interest), maysir (gambling) and gharar (uncertainties) along with Islamic values of justice, fairness and avoidance of exploitation are some of possible reason to avoid the Islamic stock market from the financial crisis.
Citation
References
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Keywords Islamic stock markets, Malaysia, CAPM, portfolio Investment
DOI http://dx.doi.org/10.15208/pieb.2017.08
Pages 95-100
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