Ranking of Shariah-Compliant Stocks using Multi-Criterium Decision Making: TOPSIS and GRA; [Pemeringkatan Saham Patuh Syariah Menggunakan Pembuatan Keputusan Berbilang-Kriterium: TOPSIS dan GRA]

• Published in: Sains Malaysiana
• Main Author: Mohd Amin F.A.B.; Jaaman S.H.B.
• Format: Article
• Language: Malay
• Published: Penerbit Universiti Kebangsaan Malaysia 2023
• Online Access: https://www.scopus.com/inward/record.uri?eid=2-s2.0-85170430464&doi=10.17576%2fjsm-2023-5206-21&partnerID=40&md5=134bdc352e4389791766ce474ca389d6

The increasing number of Shariah-compliant stocks traded in Bursa Malaysia makes the selection process for investment more crucial and challenging. Thus, investors need a quantitative mechanism that is not just based on qualitative or intuitive evaluation. In this study, the stock performance of 10 Shariah-compliant companies listed by the Securities Commission of Malaysia (SCM) is investigated according to the company’s key financial ratios such as investment, profitability, liquidity, leverage, and efficiency. The focus of this study was to rank the stock’s performance from 2017 until 2021 based on two methods namely Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) and Grey Relational Analysis (GRA). Results of this study show consistency between the two methods, especially in selecting the top two performing stocks which are NESTLE and PETGAS and the bottom three stocks consisting of MISC, PMETAL, and AXIATA. This finding indicates that GRA is an alternative method comparable to TOPSIS and able to assist investors to identify the best Shariah-compliant stocks. © 2023 Penerbit Universiti Kebangsaan Malaysia. All rights reserved.