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

Author

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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)

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.

Suggested Citation

  • Turki Rashed Alshammari & Jean-Noël Ory, 2023. "The Impact of Religious Announcements on Stock Prices and Investment Decisions on the Saudi Stock Exchange," Post-Print hal-04105704, HAL.
    • Handle: RePEc:hal:journl:hal-04105704
    DOI: 10.1016/j.bir.2023.05.002
    Note: View the original document on HAL open archive server: https://hal.science/hal-04105704
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    Keywords

    Abnormal returns; Event study; Individual Investors; Islamic Finance;
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