The Impact of Religious Announcements on Stock Prices and Investment Decisions on the Saudi Stock Exchange

Turki Rashed Alshammari () and Jean-Noël Ory ()
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Turki Rashed Alshammari: CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine, UHB - University of Hafr Al Batin [Saudi Arabia]
Jean-Noël Ory: CEREFIGE - Centre Européen de Recherche en Economie Financière et Gestion des Entreprises - UL - Université de Lorraine

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Abstract: Although many papers have examined the Saudi stock market, to date none have explored the influence of religiosity on the behavior of stock prices, taking into account the dominance of individual investors. These characteristics distinguish the Saudi stock market from other mature and immature markets. Therefore, we study the reaction of the Saudi stock market to announcements by imams regarding firms' sharia compliance, using a two-step procedure. First, we distribute a questionnaire to gauge individual opinions about imams' announcements. Then, we conduct an appropriate event-study to capture the potential abnormal returns. Our findings indicate that imams' announcements convey valuable information to the stock market.

Keywords: Abnormal returns; Event study; Individual Investors; Islamic Finance (search for similar items in EconPapers)
Date: 2023-05-23
New Economics Papers: this item is included in nep-ara and nep-mac
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Published in Borsa Istanbul Review, 2023, 23 (5), pp.1013-1025. ⟨10.1016/j.bir.2023.05.002⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04105704

DOI: 10.1016/j.bir.2023.05.002

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