Development and Validation of an Islamic Investor’s Sentiment Scale for Stock Market Investment

Abstract

Islamic law prohibits Muslims from investing in certain businesses such as banking, alcohol, and speculation. As such, Islamic investment is different from traditional investment, as investment principles emphasize ethical investing and compliance with Shariah, the Islamic rule that controls every aspect of a Muslim’s life. However, a fair review of the literature failed to find any questionnaire to measure Islamic investor sentiment. In order to create and standardize a technique to gauge Islamic investors’ attitudes about share market investment, a research was conducted. Islamic investors’ attitudes were the dependent variable, while the study identified Islamic investing ethics, religious considerations, profitability, social impact, and information accessibility as independent variables. Python programming was used to evaluate the data gathered from 391 respondents using a 24-item structured questionnaire. According to the study’s findings, each of the characteristics has a big influence on how Islamic investors feel. Furthermore, this study shows that participation in religious activities elevates the spirits of Islamic investors. The verified Islamic investor’s feelings questionnaire in this study is expected to inspire more investigation in this fascinating field.