What Drives Sharia Stock Growth? An Empirical Inquiry into Macroeconomic Determinants within the IDX Sharia Growth Index

Abstract

Navigating the complexities of Indonesia's rapidly growing Islamic capital market requires a deep understanding of macroeconomic sensitivities. This study investigates the fundamental drivers of the IDX Sharia Growth index during the 2022–2024 timeframe. By employing a panel data regression methodology on institutional data from BI, BPS, and OJK, the study uncovers divergent macroeconomic impacts. Surprisingly, while inflation and the BI 7-Day Reverse Repo Rate act as significant positive catalysts for sharia stock prices, Gross Domestic Product (GDP) presents a significant negative constraint. Meanwhile, the money supply and foreign exchange volatility remain statistically irrelevant to index movements. This research highlights that the sharia stock market possesses a distinct macroeconomic profile. The empirical outcomes provide critical guidance for investors adjusting their portfolios and serve as a robust reference for regulatory bodies aiming to sustain the momentum of Indonesia's Islamic finance ecosystem.