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Examining the Effects of Islamic Beliefs on the Valuation of Financial Institutions in the United Arab Emirates

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  • Omran M. F.

    (Nile University)

Abstract

The study examines whether United Arab Emirates (U.A.E.) investors value more Islamic financial institutions in comparison with traditional financial institutions and other companies in the economy during the period from 2001 to 2005. The study highlights the major differences between products offered by Islamic versus traditional financial institutions. It is argued that these differences do not necessarily affect the measures of profitability and performance. The main finding of the paper is that stockholders of Islamic financial institutions in the U.A.E. were willing to pay a premium for their Islamic faith. This highlights the U.A.E. clientele preference for institutions that closely follow Islamic laws.

Suggested Citation

  • Omran M. F., 2009. "Examining the Effects of Islamic Beliefs on the Valuation of Financial Institutions in the United Arab Emirates," Review of Middle East Economics and Finance, De Gruyter, vol. 5(1), pages 72-79, May.
    • Handle: RePEc:bpj:rmeecf:v:5:y:2009:i:1:n:4
    DOI: 10.2202/1475-3693.1127
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    References listed on IDEAS

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    1. Omran M. F., 2003. "Equity Valuation Using Multiples in the Emerging Market of the United Arab Emirates," Review of Middle East Economics and Finance, De Gruyter, vol. 1(3), pages 72-88, December.
    2. Sanjeev Bhojraj & Charles M. C. Lee, 2002. "Who Is My Peer? A Valuation‐Based Approach to the Selection of Comparable Firms," Journal of Accounting Research, Wiley Blackwell, vol. 40(2), pages 407-439, May.
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    Cited by:

    1. Omran M. F., 2011. "The Valuation Premium of the Common Stocks of Islamic Financial Institutions," Journal of Business Valuation and Economic Loss Analysis, De Gruyter, vol. 6(1), pages 1-21, April.
    2. Dash, Saumya Ranjan & Maitra, Debasish, 2018. "Does Shariah index hedge against sentiment risk? Evidence from Indian stock market using time–frequency domain approach," Journal of Behavioral and Experimental Finance, Elsevier, vol. 19(C), pages 20-35.

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