Dependence of Sukuk Index on Conventional Stock Indices of Pakistan

Authors

  • Dr. Hassan Shakeel Institute of Islamic Banking, University of Management and Technology

Keywords:

: KMI 30, KSE 30, KSE All, Sukuk, Correlation

Abstract

Sukuk markets are an increasing share of the Pakistan Stock exchange and a source of Shariah compliant securities for faith conscious investors in Pakistan. However, as this market started only a few years ago and is still in growing phases we need to focus our research on the same and help explore new growth possibilities along with influencing attributes within the country. In this research we have tried to find out if a relation exists between Shariah Compliant stock market (KMI 30 index) and other non Shariah compliant markets like KSE 30 and KSE All. For this purpose we have taken 5 years of daily index returns data of one KMI 30 index and two KSE Indices and used it under multiple linear regression analysis to find out if any correlation exists among these markets and the extent of this correlation as well. We have performed multiple tests to justify reliability of our data along with research model and found these to be valid. The results were consistent with our hypothesis that there exists a significant relationship among KMI Index and the KSE Indices. Lastly, we have also suggested a multiple regression equation for the same and gave reasons for this dependence.

References

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Published

2023-06-30