The Covid-19 Pandemic and its Impact on the Yields of Sharia Stock Business Portfolio in Indonesia

Abstract

Purpose: This research aims to examine the impact of the COVID-19 pandemic on the performance of stock portfolios in Indonesia, particularly the sharia stock portfolios and common stocks in response to information sentiment due to the COVID-19 pandemic on the Indonesian stock exchange. Theoretical framework: Research by Bash & Alsaifi (2019) and Shanaev & Ghimire (2019) examined the relationship between stock returns through the stock index on political activity or its connection with environmental exploitation (Alsaifi et al., 2020; Guo et al., 2020). The relationship between stock price changes with sports (Buhagiar et al., 2018) and disasters (Kowalewski & Śpiewanowski, 2020). Design/methodology/approach: The data used in this study were 564 stocks, consisting of 356 Islamic stocks and 208 common shares provided by the Osiris database. The model testing used panel data regression with a time lag approach, where information on the number of positive cases, deaths, and recoveries due to COVID-19 each week affected the performance of the stock portfolio on that day. Findings: The testing of the performance of sharia and conventional stock portfolios showed that there is no significant difference in response to the COVID-19 pandemic information, but statistical statistics on Islamic stocks have a tendency to be more resistant to pressure from selling by investors in the Indonesian capital market compared to common stock portfolios, this is proven by the sharia stock correlation coefficient shown to be positive, on the other hand, the stock regression coefficient shows the opposite direction. Research, Practical & Social implications: This research is expected to be a recommendation material that has benefits for the development of Islamic economics, primarily can be implemented by sharia-based banks in Indonesia and other countries. Originality/value: This research focuses on studying the performance of stock portfolios in Indonesia. This research responds to the impact of the Covid-19 pandemic on the performance of stock portfolios, which is focused on Islamic stock portfolios.

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