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Investing in Islamic Stocks: A Wiser Way to Achieve Genuine Interest-Free Finance الاستثمار في الأسهم الإسلامية: طريقة أكثر حكمة لتحقيق تمويل حقيقي خال من الفائدة

Author

Listed:
  • Mehmet Saraç

    (Associate Professor of Finance, Istanbul University, Turkey)

  • Salih Ulev

    (Research Assistant, Sakarya University, Turkey)

Abstract

A gradual convergence of Islamic finance towards interest-based conventional finance is one of the major concerns in the progress of Islamic finance. An important reason for this one-way convergence in the rates of returns of the two sectors is the dominance of Islamic banking in the composition of the Islamic financial sector. The investment account returns of Islamic banks depend heavily on interest rates. Whereas, Islamic stock markets are argued to be the essential domain to achieve true Islamic finance, since they are based on profit and loss sharing and are not directly dependent on interest rates. We in this paper investigate the relationship between the Islamic stock index and indicative interest rates in Turkey, using the daily data of Participation 30 index returns in Borsa İstanbul (BIST) and interest rates on indicative bonds between the years 2011-2015. We also include the BIST 100 index in the model as the control variable. The results of Maki cointegration test show that Participation 30 index is not cointegrated with interest rates, while the general index of Borsa İstanbul is significantly cointegrated with interest rates. Toda Yamamoto test based on Granger causality analysis shows that no causal relationship exists between interest rates and the Participation 30 Index, while the general index of Borsa İstanbul is influenced by interest rates. The findings provide evidence for the independency of returns on Islamic stock investments from interest rates. This result also proves that the Sharīʿah-compliant firms are less sensitive to interest rates due to their financial structure in which the interest bearing assets and sources are significantly limited. يُعد التقارب التدريجي للتمويل الإسلامي تجاه التمويل التقليدي القائم على الفائدة أحد المخاوف الرئيسية في تقدم التمويل الإسلامي. ومن الأسباب المهمة لهذا التقارب أحادي الاتجاه في معدلات عوائد القطاعين هيمنة المصارف في تكوين القطاع المالي الإسلامي. تعتمد عائدات حسابات الاستثمار في المصارف الإسلامية بشكل كبير على أسعار الفائدة. بينما تعتبر أسواق الأسهم الإسلامية مجالا أساسيا لتحقيق التمويل الإسلامي الحقيقي، لأنها قائمة على المشاركة في الأرباح والخسائر ولا تعتمد بشكل مباشر على أسعار الفائدة. تعالج هذه الورقة العلاقة بين مؤشر الأسهم الإسلامية وأسعار الفائدة الإرشادية في تركيا، باستخدام البيانات اليومية لعائدات مؤشر المشاركة 30 في بورصة اسطنبول ومعدلات الفائدة على السندات الإرشادية خلال الفترة (2011-2015م)، إضافة إلى استخدام مؤشر بورصة اسطنبول 100 في النموذج كمتغير التحكم. وتظهر نتائج اختبار التكامل المشترك "ماكي" أنه لا يوجد تكامل مشترك بين مؤشر المشاركة 30 وأسعار الفائدة، في حين أنه يوجد بشكل كبير بين المؤشر العام لبورصة اسطنبول وأسعار الفائدة. وأظهر اختبار "تودا ياماموتو" المستند على تحليل السببية غرانجر عدم وجود علاقة سببية بين أسعار الفائدة ومؤشر المشاركة 30، في حين أن المؤشر العام لبورصة اسطنبول يتأثر بأسعار الفائدة. وتقدم النتائج أدلة على استقلالية العائدات على استثمارات الأسهم الإسلامية من أسعار الفائدة. وتثبت هذه النتيجة أيضا أن الشركات المتوافقة مع الشريعة الإسلامية أقل حساسية لمعدلات الفائدة بسبب هيكلها المالي الذي يُجتنب فيه الأصول والمصادر الربوية بشكل كبير.

Suggested Citation

  • Mehmet Saraç & Salih Ulev, 2017. "Investing in Islamic Stocks: A Wiser Way to Achieve Genuine Interest-Free Finance الاستثمار في الأسهم الإسلامية: طريقة أكثر حكمة لتحقيق تمويل حقيقي خال من الفائدة," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 30(SI), pages 61-72, April.
    • Handle: RePEc:abd:kauiea:v:30:y:2017:i:4:no:4:p:61-72
    DOI: 10.4197/Islec.30-SI.4
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    References listed on IDEAS

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    More about this item

    Keywords

    Interest-Free Finance; Dependency on Interest Rates; Islamic Stock Index; Participation Index; Interest Rates. تمويل بلا فوائد، الاعتماد على أسعار الفائدة، مؤشر الأسهم الإسلامية، مؤشر المشاركة، أسعار الفائدة.;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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