Dividend Announcements of Banking Sector in Gulf Area; Pre, During and Post the Recent Global Financial Crisis

Bassam Jaara and Mahmoud Dalou

International Journal of Economics and Finance, 2018, vol. 10, issue 6, 20-35

Abstract: This research aims to analyze the movement of dividend policy announcements impact on share prices, and the performance of all listed banks in Gulf area pre-during-post the financial crisis. This research has positioned and utilized event study method, and dividend pay-out ratio to evaluate the movements in share prices of two event windows for 65 banks (All listed banks) from 2005 to 2013. The main results for this research showed that there is a strong signaling effect since most of the windows show positive impact of dividend announcements on the CAARS. Likewise, there can be equally significant lifecycle impact since the large banks show different pay out pattern as compared with the small banks. Moreover, there has been steady dividend pay by banks at an average even in the crisis periods. In addition, a proportion of payers have increased as compared to the non-payers over years, which is related to both life cycle and competition theories. The last finding presents that banking sector in the GCC countries have not been affected like other emerging countries during the global financial crisis, because they supported by oil prices.

Keywords: dividend announcement; emerging markets; dividend policy; dividend pay-out (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijefaa:v:10:y:2018:i:6:p:20-35

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