The Fundamental Analysis of Indonesian Islamic Stocks and Its Impact on Stock Prices

Abstract

Islamic stocks serve as an alternative investment vehicle aligning with Islamic law, introducing a dimension of ethical investing. The volatility in stock prices introduces investment uncertainty. This research delves into the fundamental factors of companies that exert an impact on stock prices, utilizing the Panel Data Regression method to analyze the Jakarta Islamic Index (JII) stock prices during the 2015-2020 period. The findings reveal a positive influence on stock prices from metrics such as earnings per share, price-earnings ratio, the federal funds rate, and the real effective exchange rate. Conversely, variables like debt-to-equity ratio, return on asset, GDP, and real interest rate exhibit adverse effects on JII stock prices. There are several important recommendations regarding this topic for future studies.