Investor sentiment and Islamic calendar anomaly effects: a case study of the impact of Ramadan in Jordan

Timothy Rodgers, Keith J. Redhead, Heitham Al Al-Hajieh

    Research output: Working paper/PreprintWorking paper


    The holy month of Ramadan is usually a time of celebration and renewal in Muslim countries. This paper examines whether or this is reflected in positive calendar anomalies effects in the Jordanian stock market during this period between 1992 and 2007. Evidence is found to suggest the existence of significant positive calendar effects in respect to the whole period of Ramadan and it is argued that this can be attributed to positive investor mood, or sentiment. Although Ramadan is a time of celebration for Muslims it also can be a time of uncertainty and this appears to result in the impact of this festival not having a uniformly positive impact on stock prices throughout Ramadan. It is found that, in relation to the first and last days of Ramadan, there are high levels of statistically significant year-on-year differences. It is argued that these possibly be attributed to the process of herding effects attributed to Ramadan amplifying the impact of mood swings associated with uncertainty during these periods. The paper also finds that although the overall Ramadan effect is statistically significant, it is not large enough to outweigh transactions costs and provide the basis of a profitable trading strategy.
    Original languageEnglish
    Place of PublicationCoventry
    Publication statusPublished - 2009

    Publication series

    NameEconomics, Finance and Accounting Applied Research Working Paper Series
    PublisherCoventry University

    Bibliographical note

    The full text is available free from the link given.


    • Ramadan
    • trading strategy
    • investor sentiment
    • financial trends
    • stock prices
    • behavioral finance


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