Featured Research

from universities, journals, and other organizations

Fasting 'feelgood' factor: Holy month of Ramadan reduces volatility in markets, research finds

Date:
August 10, 2010
Source:
University of Leicester
Summary:
A new international study investigating the correlation between the Islamic holy month of Ramadan and stock markets has discovered that the average stock market returns in predominantly Muslim countries were historically almost nine times higher during Ramadan compared to other months of the lunar calendar.

A new international study investigating the correlation between the Islamic holy month of Ramadan -- which begins next week (August 11/12) -- and stock markets has discovered that the average stock market returns in predominantly Muslim countries were historically almost nine times higher during Ramadan compared to other months of the lunar calendar.

Jedrzej Bialkowski (University of Christchurch, New Zealand), Ahmad Etebari (University of New Hampshire, United States) and Tomasz Piotr Wisniewski (University of Leicester, UK) also discovered that, at the same time, the volatility of these markets declined. These conclusions are based on a sample of 14 stock markets located in countries where Muslims constitute at least 50% of the population.

Dr Wisniewski, of the School of Management at the University of Leicester, said: "For many Muslims around the world, Ramadan represents a very important period of self-improvement -- it represents a spiritual and moral training that shapes their lives for the months ahead, from one Ramadan to the next. Followers of Islam are expected to help the underprivileged members of society, work towards improving their interactions with others, show forgiveness and compassion."

"It is also a time in which the social and family ties are strengthened. Fasting from dawn to dusk is an integral part of the holy month. Several academic studies confirmed health benefits arising from Ramadan-type fasting, such as lower LDL cholesterol, loss of excessive fatty tissue or reduced anxiety in the fasting subjects."

"According to the new research findings, the heightened sense of social integration and possible salubrious effects of the changed dietary regimen may influence the sentiment of the investing public."

"Our research reveals that that it is not only the fundamentals, but also psychology of investors that drives the valuations in stock markets. "

Although the trading implications for market participants are clear enough, researchers advise caution. Typically, when an anomaly is discovered, smart money will try to arbitrage it out.


Story Source:

The above story is based on materials provided by University of Leicester. Note: Materials may be edited for content and length.


Journal Reference:

  1. Jedrzej Pawel Bialkowski, Ahmad Etebari, Tomasz Piotr Wisniewski. Piety and Profits: Stock Market Anomaly During the Muslim Holy Month. Finance and Corporate Governance Conference 2010 Paper, 2010;

Cite This Page:

University of Leicester. "Fasting 'feelgood' factor: Holy month of Ramadan reduces volatility in markets, research finds." ScienceDaily. ScienceDaily, 10 August 2010. <www.sciencedaily.com/releases/2010/08/100810082642.htm>.
University of Leicester. (2010, August 10). Fasting 'feelgood' factor: Holy month of Ramadan reduces volatility in markets, research finds. ScienceDaily. Retrieved April 19, 2014 from www.sciencedaily.com/releases/2010/08/100810082642.htm
University of Leicester. "Fasting 'feelgood' factor: Holy month of Ramadan reduces volatility in markets, research finds." ScienceDaily. www.sciencedaily.com/releases/2010/08/100810082642.htm (accessed April 19, 2014).

Share This



More Science & Society News

Saturday, April 19, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Drought Concerns May Hurt Lake Tourism

Drought Concerns May Hurt Lake Tourism

AP (Apr. 18, 2014) Operators of recreational businesses on western reservoirs worry that ongoing drought concerns will keep boaters and other visitors from flocking to the popular summer attractions. (April 18) Video provided by AP
Powered by NewsLook.com
Small Reactors Could Be Future of Nuclear Energy

Small Reactors Could Be Future of Nuclear Energy

AP (Apr. 17, 2014) After the Fukushima nuclear disaster, the industry fell under intense scrutiny. Now, small underground nuclear power plants are being considered as the possible future of the nuclear energy. (April 17) Video provided by AP
Powered by NewsLook.com
Heartbleed Hack Leads To Arrest

Heartbleed Hack Leads To Arrest

Newsy (Apr. 17, 2014) A 19-year-old computer science student has been arrested in relation to a data breach of 900 social insurance numbers from Canada's revenue agency. Video provided by Newsy
Powered by NewsLook.com
Scientists Create Stem Cells From Adult Skin Cells

Scientists Create Stem Cells From Adult Skin Cells

Newsy (Apr. 17, 2014) The breakthrough could mean a cure for some serious diseases and even the possibility of human cloning, but it's all still a way off. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins