Muslim investors and the capital market: The role of religious scholars

Abdullah Almansour

doi:10.1016/j.pacfin.2019.101211

Muslim investors and the capital market: The role of religious scholars

Abdullah Almansour^*

^*Corresponding author for this work

Department of Accounting and Finance

Research output: Contribution to journal › Article › peer-review

10 Scopus citations

Abstract

We demonstrate that religious scholars play a significant role in shaping investment preferences of Muslim investors. We hand-collect texts containing Shari'a compliance advises (SCAs) by influential Shari'a scholars about the status of firms that planned an initial public offering (IPO) in Saudi Arabia during the period from 2005 to 2017. We found that the number of individuals subscribing to an IPO, on average, drops by around 60% if all Shari'a scholars agree, in their SCAs, to reject the firm as a Shari'a-compliant firm during the subscription period. Interestingly, if the scholars disagree, individuals show no significant reaction to scholars whose SCAs rejected the IPO.

Original language	English
Article number	101211
Journal	Pacific Basin Finance Journal
Volume	58
DOIs	https://doi.org/10.1016/j.pacfin.2019.101211
State	Published - Dec 2019

Bibliographical note

Publisher Copyright:
© 2019

Keywords

Initial public offering (IPO)
Islamic finance
Religion
Saudi Arabia
Social responsibility investments

ASJC Scopus subject areas

Finance
Economics and Econometrics

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title = "Muslim investors and the capital market: The role of religious scholars",

abstract = "We demonstrate that religious scholars play a significant role in shaping investment preferences of Muslim investors. We hand-collect texts containing Shari'a compliance advises (SCAs) by influential Shari'a scholars about the status of firms that planned an initial public offering (IPO) in Saudi Arabia during the period from 2005 to 2017. We found that the number of individuals subscribing to an IPO, on average, drops by around 60% if all Shari'a scholars agree, in their SCAs, to reject the firm as a Shari'a-compliant firm during the subscription period. Interestingly, if the scholars disagree, individuals show no significant reaction to scholars whose SCAs rejected the IPO.",

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AB - We demonstrate that religious scholars play a significant role in shaping investment preferences of Muslim investors. We hand-collect texts containing Shari'a compliance advises (SCAs) by influential Shari'a scholars about the status of firms that planned an initial public offering (IPO) in Saudi Arabia during the period from 2005 to 2017. We found that the number of individuals subscribing to an IPO, on average, drops by around 60% if all Shari'a scholars agree, in their SCAs, to reject the firm as a Shari'a-compliant firm during the subscription period. Interestingly, if the scholars disagree, individuals show no significant reaction to scholars whose SCAs rejected the IPO.

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Muslim investors and the capital market: The role of religious scholars

Abstract

Bibliographical note

Keywords

ASJC Scopus subject areas

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