Research Benefits ISLAMIC STOCK MARKET VOLATILITY: IS IT A PROBLEM FOR INVESTORS?

ϭϯ securities listed in Indonesia Stock Exchange IDX, whereas Sharia Securities existed in the Indonesian Sharia capital market are not only consists of 30 shares that become the constituents of JII but also consists of various types of securities besides Sharia Stocks such as Sukuk and Sharia Mutual Fund. Since November 2007, Bapepam-LK has issued Sharia Securities List which contains a list of Sharia Stock in Indonesia. With the DES, the people will be more easy to know what kind of shares are included in Sharia Stock because DES as the only reference for Sharia Securities in Indonesian. The Presence of DES followed by IDX to launch Indonesia Sharia Stock Index ISSI on May 12, 2011. ISSI constituency consists of all Sharia Stock listed on. In the same years, precisely March 8, 2011, DSN-MUI has issued fatwa No.80 concerning The Implementation of Sharia Principles in The Equity Trading Mechanism at The Stock Exchanges Regular Market. In the presence Fatwa, it should be able to increase the public confidence that sharia investment in capital market was appropriate with sharia principles as long as it meet the criteria with specified in fatwa Dewan Syariah Nasional MUI, 2011. As a follow up to the issuance of fatwas, BEI has developed a model of online trading which appropriate with sharia principles to be applied by IDX members on september, 2011. With the presence of this system, the development of sharia investment in capital market is expected to increase because the investors will be more easy and convenient to make sharia transaction. ϭϰ

2.1.3 Islamic Investment

According to Mankiw 2006, investment is the purchasing of goods by the individual and company that will be used in the future to produce more goods and services. Investment divided into three types based on the time period, such as short term investment, middle term investment and long term investment Gitman, 2011. In Islamic perspective, investment must be free from three things that prohibit in Islamic Law, such as 5LED¶ Gharar and Maysir. Maqasid al Shariah is one of the important pillars that should be considered for the improvement of the Islamic Investment. Maqasid al Shariah or the objectives of Islamic law represent the most comprehensive instrument that can enhance contemporary Islamic investment beside the Shariah rules and the regulator. The general objective of Shariah is to preserve the society order of the community and ensure the continuity of its healthy progress. The importance of the Maqasid al Shariah in developing Islamic investment comes from the position of the wealth itself in Islamic law and Maqasid al Shariah as well. This importance refers also to the objectives of Islamic law in finance and business transaction and to the overall goals of Shariah in wealth. The preservation and protection of wealth is classified under the category of necessary daruriyyar. The meanings of daruriyyar are those without the protection of which there would be anarchy and chaos in society. The absence of protection for these interests would mean loss of everything that we hold dear. Maqasid al Shariah aims to achieve various objectives in a business transaction, which are as follows: x The circulation of wealth in the business transaction