Sukuk announcement effects - a multi-country study
Capital market behavior and the effects of varying sources of capital on share price has long intrigued finance theorists (Brown & Warner, 1980) and the choice of conventional capital market instruments based on investor reaction, has been researched extensively (Abdul Rahim, 2012). Profit-driven firms focus on profit maximization and the creation of shareholder wealth. However, opting for internal funds over public fund-raising has been shown to signal quality to the market, thereby affecting overall company value (Ross, 1977). The introduction of Sukuk instruments since 2001 has also influenced market reaction (Ashhari et al., 2009). Therefore, we investigate the effects of Sukuk announcement based on different underlying structures and specific sample traits of size and tenor. The results also account for an empirically determined crisis period for each of the three largest corporate Sukuk issuing countries: Malaysia, Indonesia, and Saudi Arabia. Over the last decade and a half, Islamic capital markets have developed in regulation, market reach, and product structures.
Sukuk , Capital market , Malaysia , Indonesia , Saudi Arabia
Mahomed, Ziyaad. (2016). Sukuk announcement effects - a multi-country study. IF Hub, 2 (October 2016), pp. 11-13.