Islamic versus conventional stock market Indices synchronization

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.