Abstract

This study examines retail investors’ trading behaviour and its determinants in the Indonesian _Shari’ah_ stock market by mainly focusing on the religious practice-related factors in the form of _sadaqah_ or charitable giving on individual investors’ trading behaviour. Contextually, the Islamic moral economy (IME) assumes a direct relationship between religiosity and _sadaqah_ giving due to the _falah_ (salvation) oriented individual objective function, which can be reached through doing _ihsan_ (beneficence for equilibrium). The findings based on a questionnaire survey distributed to individual investors on _Shari’ah_ Online Trading System (SOTS) delineate that religiosity, accounting information, neutral information, personal financial needs, and the _sadaqah_ feature have significantly affected investors’ trading behaviour in which the _sadaqah_ feature is positively correlated, while religiosity factors are negatively correlated. Thus, despite the theoretical expectation through IME, this study evidences that Islamic logic is not the main determining factor, as market logic related factors seem to be more dominant in the behaviour of investors in the Indonesian capital market.