Will Getting Shariah-Compliant Stocks Has a Salient Impact on Consumer Industry in Malaysia

The demand for Halal product and service offerings especially when the Muslim segment market is dominant has significantly changed the landscape of business conducts as well as the capital market development in Malaysia. The consumer product sectors in the Bursa Malaysia Stock Exchange is currently the second largest sector filled with the Shariah-Compliant Stocks which impliedly amid a positive reaction by consumers, investors and the government for such move on becoming the religious conscious producers. However, such strategic movement so far has lack of decisive information on its value creation benefits. It is the objective of the study to investigate whether being accredited as the Shariah-Compliant Stocks brings a positive impact to the financial performance of the participating companies. The financial variable of the consumer product companies was assessed on the basis of three years before and after they were accredited as a Shariah-Compliant Stocks using the monthly Economic Value Added (EVA) as a financial performance measure. With a sample of only 10 companies that met the requirement of the data in the study, the t-paired test using the SPSS statistical software was applied to analyze the financial performance from the year 1998 to 2014. It was found that the value of the EVA posed no significant difference before and after the 72 months study periods. The study concluded that the market so far has not given credit to the companies' attempt to put on Islamic branding as the Shariah-Compliant Stocks. The value creation from the entitlement to Shariah-Compliant Stocks, therefore, warrants further research for more conclusive findings.