African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4157

Full Length Research Paper

Islamic versus conventional stock market Indices synchronization

Imed Medhioub*
  • Imed Medhioub*
  • Department of Finance and Investment, College of Economics and Administrative Sciences, Al-Imam Muhammad Ibn SaudI slamic University (IMSIU), P. O. Box 5701 Riyadh, Saudi Arabia.
  • Google Scholar
Mustapha Chaffai
  • Mustapha Chaffai
  • Department of Finance, Business School, Sfax University, Route de l'Aérodrome km 4.5, P. B. 3018, Sfax, Tunisia.
  • Google Scholar

  •  Received: 03 February 2016
  •  Accepted: 08 May 2016
  •  Published: 14 June 2016


Few works are considered to the empirical literature on the performance of shariah stock market indices compared to those of conventional markets. This work deal with the analysis of business cycle synchronization of five Islamic and their corresponding conventional markets over the period 2000 and 2014. In this research, three different measures of synchronization were proposed: The pair wise correlation coefficients of the cyclical components, the pair wise correlations of stock market returns and the concordance index. Results suggest a high degree of synchronization between Islamic and Conventional stock markets to each pair of country, except the case of Indonesia. These results confirm the point of view of some Muslim scholars considering that the mechanisms and products adopted in Islamic finance are similar to the Conventional system under the label of Shariah.

Key words: Synchronization, Islamic/conventional stock indices, concordance index.