IDEAS home Printed from https://ideas.repec.org/a/ids/ijimbr/v2y2017i2p122-133.html
   My bibliography  Save this article

Islamic banks stock market valuation: evidence from Saudi Arabia

Author

Listed:
  • Mohamed Fawzy Omran

Abstract

The paper uses data from Saudi Arabia during the period from 2003 to 2012 to examine whether investors in Saudi stock market favourably value Islamic banks. The results confirm the proposition that the financial performance of Saudi Islamic banks lagged that of the Saudi conventional banks. In contrast to earlier evidence in the literature from Islamic banks in the UAE, investors in Saudi Arabia do not pay higher price to book value multiple for the Islamic banks' stocks. The finding can be explained by the fact that Islamic banks in Saudi Arabia lag in financial performance as compared to their Saudi conventional counterparts by a greater margin than that reported in the UAE. The results suggest that there is a need to develop measures that tie up between the objectives of Islamic banks, which are by definition not wealth maximisation, and their performance measurements. Otherwise, they will continue to underperform their conventional counterparts with no proof that they have contributed to the aim of Islamic economics which is the advancement of the society.

Suggested Citation

  • Mohamed Fawzy Omran, 2017. "Islamic banks stock market valuation: evidence from Saudi Arabia," International Journal of Islamic Marketing and Branding, Inderscience Enterprises Ltd, vol. 2(2), pages 122-133.
    • Handle: RePEc:ids:ijimbr:v:2:y:2017:i:2:p:122-133
    as

    Download full text from publisher

    File URL: http://www.inderscience.com/link.php?id=84821
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ids:ijimbr:v:2:y:2017:i:2:p:122-133. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sarah Parker (email available below). General contact details of provider: http://www.inderscience.com/browse/index.php?journalID=436 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.