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The first Friday prayer of
this year's Ramadan at the Grand Mosque in Makkah.
(Photo: Ahmad
Hashad/Arab News) |
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 The unusual hosts at Manmad Junction for
Rozedars
The time for Suhur - the pre-dawn
meal Muslims take to begin the fast is always hectic. If one is traveling it won't be easy to search for suitable food to
have as Suhur at
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Washington:
A new research from the University of New Hampshire has found that
during the holy month of Ramadan, stock returns are almost nine
times higher in predominately Muslim countries than during other
times of the year.
The finding indicates that Ramadan positively affects investor
psychology and leads to optimistic beliefs that extend to investment
decisions, say researchers.
The mean annualized return earned by investors during the holy month
was 38.09 percent, compared to a gain of 4.32 percent throughout the
rest of the year, Ahmad Etebari, professor of finance and chair of
the UNH Department of Accounting and Finance said.
Observed by more than 1.5 billion Muslims, Ramadan is one of the
most celebrated religious rituals in the world. Etebari and his
co-researchers investigated stock returns during Ramadan for 14
predominantly Muslim countries over the years 1989-2007: Oman,
Turkey, Kuwait, United Arab Emirates, Qatar, Pakistan, Jordan,
Egypt, Morocco, Tunisia, Malaysia, Bahrain, Indonesia, and Saudi
Arabia.
"We believe that the Ramadan effect can best be explained by a
change in investor psychology. Ramadan is a religious month that
affects almost every aspect of Muslims' lives. Besides fasting and
prayers, Ramadan promotes heightened social awareness and a closer
relationship with Allah and with other fellow Muslims around the
world," researchers said.
"As a fundamental shared experience, Ramadan brings about a sense of
solidarity among Muslims, enhances their satisfaction with life and
encourages optimistic beliefs. This optimism affects investor
sentiment and decisions leading to the price run-ups we found," they
added.
The also checked whether the effect was due to market liquidity,
length of the daily fasting period, and some well-known fixed
calendar anomalies, notably the Monday, January and Halloween
effects. None of these factors explain the results.
"Investors seeking fast profits in the Muslim world should try to
profit from the fast, buying shares prior to the start of Ramadan
and selling them at the end of the holy month or preferably
immediately after Eid al-Fitr. Of course, there are transactions
costs that one would need to take into account, but any such costs
would appear to pale in comparison to the observed returns," the
researchers said.
"Alternatively, investors could embark on a more passive strategy by
delaying their sales until the end of the holy month or by
accelerating the timing of purchases ahead of it," they added.
(ANI)
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