This paper presents statistics to illustrate the economic effects of COVID-19 in the global economy. Poverty and unemployment in the informal sector of developing economies is on the rise. On the other hand, developed economies have also seen economic contraction. Capital markets have seen sharp decline in the early part of 2020. However, the author notes that Islamic equity portfolios were less affected. This finding is discovered in other empirical studies as well where Islamic portfolios are found to perform relatively better in economic and market downturns.
Some of the mainstream asset pricing models can be used for security analysis in Islamic equity investments from the Shari’ah perspective. However, the choice of particular asset pricing models in practical use must depend on their ability to better explain returns on Shari’ah compliant stocks.
Sukuk issuance needs to be used in providing finance for diverse needs. Corporate issuances follow the trends in business cycles. Sovereign Sukuk for development finance can provide impetus to the Sukuk issuance in cyclical downturns. In addition to that, it can also provide long-term macroeconomic support to the governments and enterprises by building the infrastructure for tomorrow.