A Network Analysis of Shariah-Compliant Stocks across Global Financial Crisis: A Case of Malaysia

Abstract

Financial network is a complex system in which transaction of securities take place. Due to its complexity, a minimum spanning tree (MST) technique is used to visualize the structure. This paper investigates the topological structure of 125 shariah-compliant stocks traded in Bursa Malaysia from the year 2000 until 2017. Financial networks of the shariah-compliant stocks are constructed using MST for three duration periods namely the pre-crisis, during crisis and post-crisis. To determine the important stocks in the networks, centrality measures are applied such as degree centrality, betweenness centrality, closeness centrality and eigenvector centrality. Lastly, overall centrality measures are computed to identify the overall characteristic of each node. The findings showed that, KUB Malaysia Berhad was the most influential stock in the pre-crisis and crisis periods. While, MK Land Holdings was the main stock in the post-crisis network.