Abstract
The objective of this study is to explore how investors execute decisions in persistence of Islamic anomalies in context of Pakistan stock exchange. Applying interpretive approach, data was acquired from PSX investor by asking a series of questions through an interview protocol. Interviews were conducted by using semi-structured interview approach. The responses were explored using NVivo 10.0 plus software. The results of the study indicated Islamic anomalies are changing emotions and perceptions of investors due to their past experience and perceived market consequences, and biased behaviors. Due to Islamic anomalies investors decisions are found to be biased and depict a self-serving, anchoring and overconfident behavior. Moreover, various conventional market factors (e.g. market capitalization, price earning and capita market line fluctuation etc.) are constant and reshaping investor decisions. Promotion of corporate culture, controlling mispricing, conducting awareness/ training sessions on rationality, capital gain than price gain is seriously required in local context. This is the first qualitative study investigating Islamic Calendar anomalies and PSX investors, leading to the formulation of sound policy implications.
Highlights
IntroductionMarket anomalies such as calendar anomalies have raised serious problems for DEPARTMENT OF ISLAMIC THOUGHT AND CIVILIZATION Volume 9 Issue 2, Fall 2019
Market anomalies such as calendar anomalies have raised serious problems for DEPARTMENT OF ISLAMIC THOUGHT AND CIVILIZATION Volume 9 Issue 2, Fall 2019Iqbal, Iqbal and MuneerIslamic Calendar Anomalies Reshaping Investor stock markets, especially in emerging or developing countries (e.g., Pakistan)
Four main themes were extracted from the data including perception, emotions, behavioral biases and decision-making as described in figure no 1 with their power
Summary
Market anomalies such as calendar anomalies have raised serious problems for DEPARTMENT OF ISLAMIC THOUGHT AND CIVILIZATION Volume 9 Issue 2, Fall 2019. Islamic Calendar Anomalies Reshaping Investor stock markets, especially in emerging or developing countries (e.g., Pakistan). Islamic Calendar anomalies (e.g., Ashoora, 12th Rabi-ul-Awal, Eid-ul-Fitar and 10th Zill-Hajj) are regarded as the key or central elements of market anomalies. In context of Pakistan Stock Exchange (PSX), Islamic Calendar anomalies significantly changed market environment, abruptly fluctuating capital market line (CML), funds flow, portfolio investment and risk seeking behaviors. Islamic Calendar anomalies (ICA) affected primary and secondary market of PSX and alarmed investors to take cautious investment decisions. ICA affected portfolio investment and loaded a robust pressure on investor behavior. The motivation of this research is to explore role of ICA in formulating investor behavior
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