Factors which affect investors’ decisions in Arab financial markets : comparative study

Other Title(s)

العوامل التي تؤثر على قرارات المستثمرين في الأسواق المالية العربية : دراسة مقارنة

Dissertant

al-Qarain, Adli Awad Hamdan

Thesis advisor

al-Almi, Muhammad wahib

Comitee Members

Gharayibah, Hisham
al-Najjar, Hanan Ibrahim
Khuri, Ratib

University

Amman Arab University

Faculty

College of Business

Department

Department of Finance

University Country

Jordan

Degree

Ph.D.

Degree Date

2006

English Abstract

This comparative study aims to determine the factors that affect investors’ decisions in four Arab financial markets.

They are Tunisia, Bahrain, Egypt and Jordan.

These markets were selected on geographical and cultural bases to represent a total of fifteen Arab financial markets who are members of The Arab Monetary Fund, AMF.

To achieve the objectives, it was necessary to do onsite field research.

The target population was active investors and a group of selected market experts in each country.

The purposive sample method was used for the structured interviews while the random sample method was used for the survey.

Primary data was analyzed by SPSS.

This research draws on several important aspects of markets’ economics and psychology.

It demonstrates the connection between investors’ decisions and standard economic and behavioral theories such as utility theory, behavioral finance theory and prospect theory.

The study comes on the heals of the incredible performance of Arab stock markets in the last two years during which share prices reached unprecedented levels.

The study looks at the economic and psychological factors in order to arrive at a comprehensive assessment of how Arab investors conduct business in markets.

Our findings indicate that cultural differences did impact the results in a significant way.

They also indicate that although Arab investors have made progress in their perception of investing in equities, they need more education and training on the intricacies of stock markets.

The findings suggest that the majority of investors in the sample are short term speculators.

Sampled investors generally have a positive outlook on their markets.

They intend to stay invested in stocks at least for the next twelve months but they don’t believe that markets can recover from a major correction.

On the economic side, they realize the impact of economic and fundamental factors on stock prices and consequently on their decisions.

On the behavioral side, the results suggest that Arab investors in the sample are influenced by herd behavior and they do not have a consistent risk attitude.

They are fearful but not greedy and do not appear to be subjected to mental accounting.

On the technical side, sampled investors need to be educated and trained on how to use basic investing techniques such as asset allocation, diversification and fundamental analysis.

It was strongly recommended that behavioral finance and practical investing be introduced in Arab universities and institutions.

Main Subjects

Financial and Accounting Sciences

Topics

• Investments
• Arab world

No. of Pages

239

Table of Contents

• APA
• MLA
• AMA

Language

English

Data Type

Arab Theses

Record ID

BIM-556571