The Valuation Premium of the Common Stocks of Islamic Financial Institutions

Omran M. F.
Additional contact information
Omran M. F.: Nile University

Journal of Business Valuation and Economic Loss Analysis, 2011, vol. 6, issue 1, 21

Abstract: The study examines the valuation premiums paid by investors for the common stocks of Islamic financial institutions in the United Arab Emirates (UAE). The UAE stock markets, during the period 2001-2005, were dominated by financial institutions which counted for 58% of all listed stocks. The study employs the price to book and the price to sales valuation multiples. Valuation by price to book value is more relevant and accurate for financial firms due to the high liquidity of their assets. It is found that there is a strong clientele preference for Islamic stocks despite the modest financial performance achieved in comparison with other financial institutions and insurance companies. The clientele preference in the UAE, measured by higher valuation premium, is for Islamic financial institutions first followed by commercial banks and last by traditional insurance companies and financial services companies.

Keywords: Islamic financial institutions; valuation; clientele preference (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.2202/1932-9156.1095 (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bpj:jbvela:v:6:y:2011:i:1:n:1

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/jbvela/html

DOI: 10.2202/1932-9156.1095

Access Statistics for this article

Journal of Business Valuation and Economic Loss Analysis is currently edited by Bradley T. Ewing and James J. Hoffman

More articles in Journal of Business Valuation and Economic Loss Analysis from De Gruyter
Bibliographic data for series maintained by Peter Golla ().