Retail Investor Attention, Foreign Investors and Crash Risk: Evidence on Indonesian Shariah-compliant Equities Aang Kunaifi 1* , Geodita Woro Bramanti 1 , Muhammad Ibnu Sina Al Hanif 1 1 Department of Business Management, Institut Teknologi Sepuluh Nopember, Surabaya 60111, Indonesia * Corresponding author. Email: aang_kunaifi@mb.its.ac.id ABSTRACT. This study analyzes how retail investor attention and foreign investors are related to stock price crash risk in shariah-compliant equities. Using quarterly data in Islamic stocks that listed on the Indonesian Capital Market during 2016- 2019, we show that retail investor attention and foreign investors are negatively associated with stock price crash risk. The retail investor attention and foreign investors diminish stock price crash risk in shariah-compliant equities. In conclusion, the benefit of active attention that retail investor pay and increasing foreign investor mitigate crash risk in shariah-compliant equities Keywords: Retail investor attention; Foreign investors; Crash risk; Shariah-compliant; Equity 1. INTRODUCTION Stock price crash risk has been financial issue in asset pricing [1]. The sudden movement of stock price could cause losses to investors assets. Stock price crash risk is measured by skewness of firm-specific return distribution. The skewness distribution of return is not only caused by investor confidence and sentiment but also caused by economic effect. The investors sentiment will impact on financial market outlook and capital market index. Indonesia Sharia Stock Index (ISSI) has been launched on May 12, 2011. ISSI consist of Islamic stock listed on Indonesia Stock Exchange (IDX). Islamic stock/ equity as an alternative investment class for all investors is growing rapidly [2], especially as an alternative to moslem investor to invest in shariah-compliant equity. But ISSI constituent have been updated every twice a year. The Islamic stock has been evaluated and can be enter and come- out to ISSI constituent. This re-selected procedure in Islamic stock makes uncertainty to investors in shariah- compliant equities. Investors in shariah-compliant equity can be classified as a faith-based investor and conventional investor [3]. A faith-based investor selects stock based on religious beliefs [4]. Investment decision making with Islamic investing criteria have several challenges to choose the stock and arrange portfolio rebalancing [5]. Investors in shariah-compliant equities, especially for a faith-based investor, must be update and give more attention on their portfolio for not only keeping the stock return but also the shariah-compliant that must be considered to make decision making on investment. Investors in Islamic stock will not be worse by choosing Islamic stock rather than conventional ones [6]. Information availability and current stock price can express an market efficiency. Investors gather their information to make investment decision making by using internet information, This is a monitoring mechanism that investors usually do. This information Procedia Business and Financial Technology 2807-131X (online), https:/ / pbft.academicjournal.io. Production and hosting by Academic Journal, Inc. on behalf of Universitas Nahdlatul Ulama Surabaya Copyright © Author(s). This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). To view a copy of this license, visit https:/ / creativecommons.org/ licenses/ by/ 4.0/ . Proceedings of the 2nd International Conference on Business and Management of Technology (ICONBMT 2020) - Part 2 134/180