Ahmad Etebari

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

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 stock returns during Ramadan are almost nine times higher and 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.

Market Impact of Announcements of Joint Ventures between U.S. Firms and Eastern and Central European Countries: Early Evidence

The world economies are undergoing major changes. The 1992 program for a barrier-free market in the European Community is getting closer to a reality In the Americas, with the signing of a major trade agreement between Canada and the U.S., and the likelihood of a broader free trade agreement among Canada, Mexico, and the U.S.l, a new economic bloc is slowly shaping up. In Asia, Australia and most other parts of the world, economic deregulations are being continued and industries previously controlled by governments are being rapidly privatized.’ Similar, though far more dramatic, changes are also occurring in Eastern and Central Europe. Presently, the countries in this region are in the midst of radical transformation from centrally planned to market-oriented economies. These changes have created new opportunities for export, cooperative trade, and various forms of direct foreign investment. These opportunities have come about at a time when firms in the worlds major markets-U.S., Western Europe and Asia-have been facing intense competition in both domestic and international markets. The increased competition has forced many firms in these markets to devise means to take advantage of the new opportunities all over the globe.3 The U.S. firms have historically been active in trade and investment throughout the world. Recently, however, Europe seems to have become the “world” in the minds of many U.S. businessmen, Because of the anticipated economic integration of the European Community in 1992 and the possible protectionist measures against firms from other economic blocs, many U.S. firms have already taken measures to position themselves as insiders rather than as mere exporters in

Analyst Earnings Forecast Trends in Pacific Rim Countries

This study analyzes trends in analyst forecast properties from 1987 through 1998 in the United States and seven Pacific Rim countries: Australia, New Zealand, Taiwan, Hong Kong, Japan, South Korea, and Thailand. Analyst forecast properties in the United States have become less dispersed, more accurate, and less optimistic during the sample period. Similar trends exist in Australia and New Zealand, but not in the other sample countries. In contrast, the forecast property trends of most Asian countries are the exact opposite. For example, in Japan and Korea, forecast dispersion, forecast error, and optimism all significantly increase over the sample period. The results suggest that Asian firms do not play the U.S.‐style earnings game in which managers guide analysts toward a certain target number and then report earnings that beat the target.