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All Journal IJIBE (International Journal of Islamic Business Ethics) Indonesian Capital Market Review
Fodol, Mohamed Zakaria
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Economics, Econometrics & Finance

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THE IMPACT OF UNANTICIPATED POLITICAL EVENTS ON STOCKS MARKET RETURNS: EMPIRICAL EVIDENCE FROM SAUDI ARABIA Fodol, Mohamed Zakaria; Bin Abdul Aziz, Hassanuddeen
IJIBE (International Journal of Islamic Business Ethics) Vol 4, No 2 (2019): September 2019
Publisher : UNISSULA

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.30659/ijibe.4.2.659-675

Abstract

Abstract:This study aims to identify the effect of unexpected political-events on Saudi stock market returns based on the efficient market hypothesis (EMH) assumptions.  The disappearance of the Saudi journalist Jamal Khashoggi in Turkey is the political event has been determined in this study.  The data collected from ten companies traded in the Saudi stock market which accounted for more than 62 percent of the total market capitalization. However, this paper applied the Event Study Methodology. The results showed that the Saudi stock market initially reacted to the event and tried to absorb the information received but could not correct itself in most of the window event period. It seems that the market did not get the relevant news quickly or clearly. So, the information that flow among traders was not readily available for the investors at the same level and time. Ultimately, the Saudi stock market is described as a weak-form market (inefficient).Keywords: Unanticipated political events, the stock market, expected returns, abnormal returns, cumulative returns, event study methodologyAbstract: This study aims to identify the effect of unexpected political-events on Saudi stock market returns based on the efficient market hypothesis (EMH) assumptions.  The disappearance of the Saudi journalist Jamal Khashoggi in Turkey is the political event has been determined in this study.  The data collected from ten companies traded in the Saudi stock market which accounted for more than 62 percent of the total market capitalization. However, this paper applied the Event Study Methodology. The results showed that the Saudi stock market initially reacted to the event and tried to absorb the information received but could not correct itself in most of the window event period. It seems that the market did not get the relevant news quickly or clearly. So, the information that flow among traders was not readily available for the investors at the same level and time. Ultimately, the Saudi stock market is described as a weak-form market (inefficient).Keywords: Unanticipated political events, the stock market, expected returns, abnormal returns, cumulative returns, event study methodology.
The Impact of Covid-19 Pandemic on Islamic Health Insurance Market Returns: Empirical Evidence from Saudi Arabia Fodol, Mohamed Zakaria; Aslan, Hakan
Indonesian Capital Market Review Vol. 15, No. 1
Publisher : UI Scholars Hub

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Abstract

This study aims to identify the impact of COVID-19 on the Cooperative Health Insurance (CHI) Market in Saudi Arabia by applying the Event Study Methodology. The announcement of the first positive case of COVID-19 in Saudi Arabia, which the Ministry of Health announced on March 2, 2020, is the health event identified in this study. The daily price of 24 cooperative health insurance companies listed on the Saudi Stock Market (Tadawul) with the market index (TASI) for the same period (June 05, 2018 - March 30, 2020) was collected. The abnormal returns are calculated by using Capital Asset Pricing Model (CAPM). The study found a negative effect of COVID-19 on the health insurance companies in Saudi Arabia during the first week of the anticipation period and continued until the event day. Negative abnormal returns persisted until the end of the total study period but were not statistically significant except for only three days in the post-event window (March 05, 08, and 09 2020). This means the Saudi cooperative insurance market was experiencing a period of anticipation and anxiety before the announcement of the first case of Covid-19; however, the information was insufficient and unconfirmed. During the adjustment window, the market tried to adjust itself and react to the event efficiently, but it could not do so. According to the efficient market hypothesis, the Saudi cooperative insurance market is not fully efficient. This study only sheds light on the Corona pandemic's effects in a short period. Indeed, the need for extensive future research remains. The results of this study are useful to Islamic insurance investors, Takaful operators, regulators in the Islamic insurance markets (Takaful and Cooperative), and researchers and academicians alike.
Co-Authors Aslan, Hakan Bin Abdul Aziz, Hassanuddeen