Fasting in the month of Ramadan is among the five fundamental pillars in Islam. The month is received as a period of celebrating religious activities. People read the Holy Quran in this month and offer special night prayers known as “Tarawih”. The Holy Quran describes that a particular night in Ramadan is better than a thousand months in Surah al-Qadr: Verse 3. The concept of Islam is that the month of Ramadan should be used by Muslims to train themselves to perform good deeds and improve the society through their exemplary actions.
The spiritual month of Ramadan with its fasting activity is bound to impact the regular economic activities in Muslim countries. This month is therefore, bound to impact the securities market, especially in the …show more content…
His study describes that Ramadan directly impacts the Saudi Stock Exchange through the use of both unconditional and conditional risk models. The different models resulted in obtaining different values, but all of them exhibited a specific Ramadan effect. There are also relevant literature, which is available on the impact of religious occasions on the performance of different financial securities. Various researchers such as Ariel (1988), Lakonishok and Smidt (1988) and Cadsby and Ratner (1992) found that different stock exchanges experience calendar based anomalies. They found that important holidays such as Christmas and Good Friday positively impacted the stocks, which increased before such holidays. Frieder and Subrahmanyam (2004) carried out a similar research in the United States, when they looked at the impact of the major Jewish holidays on the US equity markets. The studies found contrasting results. The Jewish New Year or Rosh HaShanah was noted to produce a significant increase in the stock markets, but Yom Kippur on the other hand produced a downfall in the stock returns. The study found that this trend was due to the nature of these two holidays. Rosh HaShanah marks the start of the year and the High Holy Days, while Yom Kippur is a more solemn event in which the Jews are engaged in prayers and fasting for the complete
The spiritual month of Ramadan with its fasting activity is bound to impact the regular economic activities in Muslim countries. This month is therefore, bound to impact the securities market, especially in the …show more content…
His study describes that Ramadan directly impacts the Saudi Stock Exchange through the use of both unconditional and conditional risk models. The different models resulted in obtaining different values, but all of them exhibited a specific Ramadan effect. There are also relevant literature, which is available on the impact of religious occasions on the performance of different financial securities. Various researchers such as Ariel (1988), Lakonishok and Smidt (1988) and Cadsby and Ratner (1992) found that different stock exchanges experience calendar based anomalies. They found that important holidays such as Christmas and Good Friday positively impacted the stocks, which increased before such holidays. Frieder and Subrahmanyam (2004) carried out a similar research in the United States, when they looked at the impact of the major Jewish holidays on the US equity markets. The studies found contrasting results. The Jewish New Year or Rosh HaShanah was noted to produce a significant increase in the stock markets, but Yom Kippur on the other hand produced a downfall in the stock returns. The study found that this trend was due to the nature of these two holidays. Rosh HaShanah marks the start of the year and the High Holy Days, while Yom Kippur is a more solemn event in which the Jews are engaged in prayers and fasting for the complete