Returns of Islamic Stocks in Saudi Arabia: Segmentation and Risk-Aversion

Authors

  • Abdullah M. Al-Awadhi Assistant Professor, PAAET
  • Ahmad Bash Assistant Professor, PAAET
  • Ahmad F. Al-Mutairi Lecturer, PAAET
  • Ahmad M. Al-Awadhi Managing partnet, Kuwait Consultancy Group

Abstract

This study investigates whether religious-based trading practices affect market returns. We use data from Saudi Arabia, which has clear defined religious rules on investing in stock markets. Using panel regression model, we find that non-Islamic stocks in this market have lower returns compared to Islamic stocks. These results conflict with Merton's market segmentation theory.

Keywords: Returns; Islamic stocks; risk-aversion; segmentation; investment

JEL Classifications: C58, E44, G32

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Published

2018-03-16

How to Cite

Al-Awadhi, A. M., Bash, A., Al-Mutairi, A. F., & Al-Awadhi, A. M. (2018). Returns of Islamic Stocks in Saudi Arabia: Segmentation and Risk-Aversion. International Journal of Economics and Financial Issues, 8(2), 238–242. Retrieved from https://www.econjournals.com/index.php/ijefi/article/view/5974

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