The impact of credit rating as scoring methods on GCC market indexes

Abstract

The aim of this paper is to investigate whether country credit rating changes announcement has a significant impact on GCC Stock Market Index. As per researcher knowledge, none has been done on the GCC. Using event study methods in estimation of the relationship between the credit rating agency Moody’s and GCC stock markets indexes over 11 years period between 2004 to Jun 2015. The sample of this study is relatively related to GCC stock markets indexes, it focuses on all the long-term country credit rating decisions by Moody’s and its impact on short-terms investments and stock markets. Moreover it considers the gap between long-terms and the short-terms investor singular events. The result of our paper indicate that the impact of credit rating agency Moody’s on GCC Stock Markets Indexes is insignificant and have no impact, taking into consideration the impact of 2008 financial crisis.