Emerging Markets: Evaluating Graham's Stock Selection Criteria on Portfolio Return in Saudi Arabia Stock Market

Authors

  • Nadisah Zakaria Prince Sultan University
  • Fariza Hashim

Abstract

Graham's stock selection criteria enable investors to be more cautious in selecting their portfolios in order to generate abnormal return. Graham's model was widely examined in various developed market where the stock markets and companies are more mature and economy of the countries are more stable. However, the selection criteria model was not commonly examined in emerging countries despite of their rapid economic growth and diversified sectors in the stocks trading. Hence, this study attempts to investigate the relevance of Graham's stock selection criteria on the portfolio returns of the Saudi Arabia stock market. Saudi Arabia represents the fastest growing market in the Middle East primarily AGCC region thus testing the market is justified. The study found that despite of being young and immature stock market, Saudi stock market was able to offer abnormal return to the investors and Graham's model of stock selection is indeed valuable to investors.

Keywords: net current asset value, Benjamin Graham, value investing

JEL Classification: G14

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Author Biography

Nadisah Zakaria, Prince Sultan University

Dr. Nadisah ZakariaNadisah Zakaria is currently an Assistant Professor at Prince Sultan University, Riyadh, Kingdom of Saudi Arabia. Her main research interest is in the pricing and mispricing of the stock market quoted shares, corporate restructuring and investment. Nadisah has published her works in several journal publications and conference articles in aforementioned topics, and has received research grants locally and internationally. Her current research project focuses on value investing approach in the Middle East and Asian stock markets. Dr Fariza HashimDr Fariza Hashim is an Associate Professor at Prince Sultan University, Riyadh, Saudi Arabia. She graduated from Aston University, UK for Phd; Cardiff University for Master degree and Oklahoma State University for her bachelor degree. She has taught in several universities in Malaysia and Saudi Arabia. She specializes in International Business Strategy and Entrepreneurship and has been teaching at both undergraduate and postgraduate levels. She has published numerous articles in international journals which are Scopus indexed and other indices as well as written several books in international business. Her research interest includes Internationalization, Entrepreneurship, FDI and Organizational Behavior. 

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Published

2017-04-03

How to Cite

Zakaria, N., & Hashim, F. (2017). Emerging Markets: Evaluating Graham’s Stock Selection Criteria on Portfolio Return in Saudi Arabia Stock Market. International Journal of Economics and Financial Issues, 7(2), 453–459. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/4180

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Articles