The impact of Islamic events on herding behaviour in Saudi Arabian equities market

Dina Gabbori, Nader Virk, Nadeem Aftab, Basel Awartani

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


Using data from Saudi Arabia, a strictly religious society, we examine how Islamic events (i.e., Ramadan, Eid-ul-Fitr, Eid-ul-Adha and Ashoura) moderate the impact of social mood (positive and negative) on herding in the stock market. We use the cross-sectional absolute deviation (CSAD) of returns and find that investors' mood during Islamic events of Eid-ul-Fitr, Eid-ul-Adha and Ashoura significantly affects herding behaviour in the market. Our results, however, contrast with existing evidence of herding in the month of Ramadan. Overall, results are robust after controlling for market conditions (i.e., domestic and US market returns, liquidity, sentiments, and oil price volatility) and crisis events (i.e., global financial crisis and Arab Spring). Though most prior research investigates the impact of individual Islamic events on stocks as seasonal anomalies, our study contributes by jointly exploring how four key Islamic events, associated with contrasting moods, induce diverse herding patterns in the Saudi stock market.

Original languageEnglish
Pages (from-to)119-134
Number of pages16
JournalInternational Journal of Finance and Economics
Issue number1
Early online date20 Jul 2022
Publication statusPublished - 1 Jan 2024
Externally publishedYes


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