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Piety and Profits: Stock Market Anomaly During the Muslim Holy Month

Jedrzej Pawel Bialkowski
University of Canterbury - Department of Economics and Finance

Ahmad Etebari
University of New Hampshire

Tomasz Piotr Wisniewski
University of Leicester


September 8, 2009


Abstract:     
Observed by more than 1.5 billion Muslims, Ramadan is one of the most celebrated religious rituals in the world. We investigate stock returns during Ramadan for 14 predominantly Muslim countries over the years 1989-2007. The results show that during Ramadan stock returns are almost 9 times higher, but less volatile, than during the rest of the year. No discernible difference in trading volume is recorded. We find these results consistent with a notion that Ramadan positively affects investor psychology, as it promotes feelings of solidarity and social identity among Muslims world-wide, leading to optimistic beliefs that extend to investment decisions.

Keywords: Ramadan Effect, Behavioral Finance, Market Efficiency, Religion

JEL Classifications: G12, G14

Working Paper Series

Date posted: September 09, 2009 ; Last revised: January 19, 2010

Suggested Citation

Bialkowski, Jedrzej Pawel, Etebari, Ahmad and Wisniewski, Tomasz Piotr, Piety and Profits: Stock Market Anomaly During the Muslim Holy Month (September 8, 2009). Available at SSRN: http://ssrn.com/abstract=1470048


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Contact Information

Ahmad Etebari (Contact Author)
University of New Hampshire ( email )
15 Academic Way
Durham, NH 03824
United States
1 603 862 4965 (Phone)
Jedrzej Pawel Bialkowski
University of Canterbury - Department of Economics and Finance ( email )
Private Bag 4800
Christchurch New Zealand
Tomasz Piotr Wisniewski
University of Leicester ( email )
Leicester LE1 7RH
United Kingdom
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