IMPACT OF THE COVID-19 PANDEMIC ON ISLAMIC BANK INDICES OF THE GCC COUNTRIES
Keywords:
Islamic Banks, The COVID-19 pandemic, Islamic Indices, Banking Sector, GCC Markets, Dow Jones Islamic Market Index.
Abstract
The present study explores the impact of the COVID-19 pandemic on Islamic bank indices in GCC countries banking sector. The research aims to know the ability of Islamic Bank indices to face the COVID-19 crisis and examine whether Islamic bank indices can respond to the volatility in the stock exchanges. The study uses data of stock exchanges and Dow Jones Islamic Market Index in GCC countries banking sector to relate the data before and during the COVID-19 crisis. It is found that Islamic banks have ability to respond the financial and economic crisis. Also, Islamic banks are able to provide their valuable services continuously and perform their financial activities during and after the crisis competently. The results also indicate that Islamic Bank Indices in GCC countries have performed better during 2019 with significant closing prices compared to 2020. As during 2020 fifteen banks recorded normal decreasing in its indices and six Islamic banks achieved growth in its indices. In Q1, Q2 of 2021 the Islamic banks achieved positive growth in its indices price. This specifies that Islamic Banks have managed the financial and economic crisis in an efficient manner.
JEL Classification Codes: E44, E58, G24, G18, H12.
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S&P Global Report (2021). Dow Jones Islamic Market GCC Index, Equity. Retrieved from www.spglopal.com/spdji
Thalassinos, E., Pintea, M., & Iulia, R. (2015). The Recent Financial Crisis and Its Impact on the Performance Indicators of Selected Countries during the Crisis Period: A Repl. International Journal in Economics and Business Administration, 3(1), 3-20.
Wasiuzzaman, S. (2010). Impact of the global financial crisis on the volatility of the Malaysian stock market.
Zehri, C., Abdelbaki, A., & Bouabdellah, N. (2012). Effects of The Current Financial Crisis on Islamic Banks Compared to Conventional Bank. Banks and Bank Systems, 7(1), 83-93.
Alpen Capital. (2021). Islamic Finance and Wealth Management Report June 29, 2021. Retrieved from http://www.alpencapital.com/downloads/reports/2021/Alpen-Capital-Islamic-Finance-Industry-July-6-2021.pdf
Ali, R., & Afzal, M. (2012). Impact of Global Financial Crisis on Stock Markets: Evidence from Pakistan and India. Journal of Business Management and Economics. 3(7), 275-282.
Aldasoro, I., Fender, I., Hardy, B., & Tarashev, N. (2020). Effects of Covid-19 on the banking sector: the market's assessment (No. 12). Bank for International Settlements.
Abdullahi, S. I. (2021). Islamic equities and COVID-19 pandemic: measuring Islamic stock indices correlation and volatility in period of crisis. Islamic Economic Studies. https://doi.org/10.1108/IES-09-2020-0037.
Almonifi, Y. S. A., Rehman, S. U., & Gulzar, R. (2021). The COVID-19 Pandemic Effect on the Performance of the Islamic Banking Sector in KSA: An Empirical Study of Al Rajhi Bank. International Journal of Management, 12(4), 533-547.
Arab Monetary Fund. (2021). Performance of Arab Stock Exchanges. Retrieved from https://www.amf.org.ae/ar/sites/default/files/econ/amdb/2021/1
Bahrini, R., & Filfilan, A. (2020). Impact of the Novel Coronavirus on Market returns: Evidence from GCC Countries. Quantitative Finance and Economics, 4(4), 640–652.
Bahrain Bourse. (2020). Annual Report. Retrieved from https://www.bahrainbourse.com/sysimages/publication/documents/BHB_AR20_En.pdf
Bahrain Bourse. (2021). Monthly Trading Bulletin. June 2021. Retrieved from https://www.bahrainbourse.com/sysimages/publication/documents/June
Bank Nizwa. (2020). Annual Report. Retrieved from https://www.banknizwa.om/media/3398/bn-ar-2020-ar.pdf
Chaouachi, M., & Slim, C. (2020). Current covid-19 impact on Saudi stock market: Evidence from an ARDL model.
El-Basuony, H. (2020). Effect of COVID-19 on the Arab Financial Markets Evidence from Egypt and KSA. IOSR Journal of Business and Management. 22(6), 14-21.
Erfani, G., & Vasigh, B. (2018). The impact of the global financial crisis on profitability of the banking industry: a comparative analysis. Economies, 6(4), 66.
Galy, A. (2021). The Islamic Banks Assets in Qatar. Mubasher. Retrieved from https://www.mubasher.info/news/3802652
Ganar, Y. B., Agrasadya, D., Apriansyah, M., Sahroni, Z., Sampurnaningsih, S. R., Rachmawaty, N., ... & Sunarsi, D. (2020). The reaction of the sharia stock market in the early days of the Covid-19 pandemic in Indonesia. Systematic Reviews in Pharmacy, 11(11), 1516-1526.
Hidayat, S. E., Farooq, M. O., & Alim, E. A. (2020). Impacts of the COVID-19 Outbreak on Islamic Finance in the OIN Countries. Indonesia: Komite Nasional Ekonomi dan Keuangan Syariah.
Irfan, M., Kassim, S., & Dhimmar, S. (2020). Impact of Covid-19 on Islamic Stock Markets: An Investigation using Threshold Volatility and Event Study Models. International Journal of Islamic Economics and Finance, 4(1), 121-148.
Kassim, S. H. (2010). Global financial crisis and integration of Islamic stock markets in developed and developing countries. Institute of Developing Economies, Japan External Trade Organization.
Kuwait Bourse (2020). Annual Report. Retrieved from https://www.boursakuwait.com.kw/api/documents/boursa/1616587507361.pdf
Miniaoui, H., Syani, H., & Chaibi, A. (2015). The Impact of Financial Crisis on Islamic and Conventional Indices of the GCC Countries. The Journal of Applied Business Research, 31(2), 357-370.
Njiforti, P. (2015). Impact of the 2007/2008 Global Financial Crisis on the Stock Market in Nigeria. CBN Journal of Applied Statistics, 6(1), 49-68.
Noor, M. (2020). Islamic Finance in Saudi. Alwatan News. Retrieved from https://www.alwatan.com.sa/article/1047043
Saleh, R. B. (2020). The Impact of Covid-19 on the Shanghai Stock Exchange. Journal of Pure & Applied Sciences, 19(6), 85-91.
Sansa, N., & Hasan, A. (2020). The Impact of the COVID - 19 on the Financial Markets: Evidence from China and USA. Electronic Research Journal of Social Sciences and Humanities, 2(2), 29-39.
Shehar Yar, A. (2020). Impact of COVID-19 on Performance of Pakistan Stock Exchange Lahore. Retrieved from https://mpra.ub.uni-muenchen.de/101540
Sutrisno, S., Panuntun, B., & Adristi, F. I. (2020). Pandemic Impact of COVID-19 on the Stock Market Index and Return of Stock Market Index (event study on stock market index in Asian exchange). MODUS, 33(1), 47-66.
Sukmana, R., & Kolid, M. (2012). Impact of global financial crisis on Islamic and conventional stocks in emerging market: an application of ARCH and GARCH method. Asian Academy of Management Journal of Accounting & Finance, 31(2), 357-370.
S&P Global Report (2021). Dow Jones Islamic Market GCC Index, Equity. Retrieved from www.spglopal.com/spdji
Thalassinos, E., Pintea, M., & Iulia, R. (2015). The Recent Financial Crisis and Its Impact on the Performance Indicators of Selected Countries during the Crisis Period: A Repl. International Journal in Economics and Business Administration, 3(1), 3-20.
Wasiuzzaman, S. (2010). Impact of the global financial crisis on the volatility of the Malaysian stock market.
Zehri, C., Abdelbaki, A., & Bouabdellah, N. (2012). Effects of The Current Financial Crisis on Islamic Banks Compared to Conventional Bank. Banks and Bank Systems, 7(1), 83-93.
Published
2021-10-11
How to Cite
Rehman, S. U., Almonifi, Y. S. A., & Gulzar, R. (2021). IMPACT OF THE COVID-19 PANDEMIC ON ISLAMIC BANK INDICES OF THE GCC COUNTRIES. International Journal of Islamic Banking and Finance Research, 7(1), 1-17. https://doi.org/10.46281/ijibfr.v7i1.1381
Section
Original Articles/Short Communications
Copyright (c) 2021 Shakeel Ul Rehman, Yasser Saleh Ali Almonifi, Rafia Gulzar
This work is licensed under a Creative Commons Attribution 4.0 International License.
