Sharia-Compliant Investment Forecasting to Support Green Industrial and Energy Transition in Indonesia

¹ Brawijaya University, Department of Statistic, Faculty of Mathematics & Natural Sciences, 65145 Malang, Indonesia
² National Research and Innovation Agency, Directorate for Economy, Employment and Regional Development Policy, 10340 Jakarta, Indonesia
³ Ministry of National Development Planning, Directorate of Higher Education, Science, and Technology, 10310 Jakarta, Indonesia
⁴ Muhammadiyah University of Jakarta, Department of Management, Faculty of Economic & Business, 15419 South Tangerang, Indonesia
⁵ National Research and Innovation Agency, Bureau for Legal and Cooperation, 10340 Jakarta, Indonesia

Abstract

Fluctuating stock prices in the capital market provide significant opportunities for investors to profit from price differences. According to data from the Financial Services Authority (OJK), sharia-compliant stocks experience stable growth and tend to increase. Furthermore, the industrial sector is considered to have lower volatility, thus helping to design more effective investment strategies that are responsive to market changes. Sharia-compliant stocks, particularly in the industrial sector, achieved the second-best record performance, indicating that the industrial sector has significant potential for continued growth. Therefore, this study will conduct a five-year forecast to assess the potential of sharia-compliant stocks in the industrial sector. The analysis will use ARIMA and double exponential smoothing methods. The best stocks will be selected using a fundamental analysis approach, specifically the parameters PBV, EPS, PER, and EV relative to EBITDA. Combining these two methods is more efficient because it selects the best stocks from the fundamental approach, while ARIMA and double exponential smoothing methods are used for long-term forecasting. The two methods are compared by observing the lowest standard error value using Mean Absolute Percent Error (MAPE).