The Short and Long-Run Performance of Sharia-Compliant Initial Public Offerings (IPOs) in the Emerging Market: Evidence from the Saudi Arabia Share Market

This study examines the short- and long-run share performance of 40 Sharia-compliant IPO companies listed on the Saudi Arabia Stock Exchange (Tadawul) from 1st January 2000 to 31st August 2017. This study employs both market-adjusted initial returns and buy-and-hold abnormal return to measure the share performance of IPOs. First, the analysis shows that Sharia-compliant IPOs are underpricing with abnormal initial returns of 79.23%. Second, the results suggest that investors could earn positive and significant market-adjusted BHAR of 14.67% if they held IPO shares over the eighteen-month period following the listing date when EWI is used as a market benchmark. This study also finds that IPO companies outperformed the VWI although the results are insignificant. The findings on the long-run overperformance contribute to the IPO literature on long-run performance of Sharia-compliant IPOs. The present study would benefit foreign investors and market regulators who are trying to understand the market behaviour in an emerging market

Method of Payments in the Merger and Acquisitions Transaction: The Case of Saudi Arabia

The performance of mergers and acquisitions companies has been broadly investigated in diverse advanced share markets primarily in the US and UK economies. However, little evidence has been found in an emerging market like Saudi Arabia. For this reason, this study examines the long-run share performance of acquirer' companies listed on the Saudi Arabia Stock Exchange (Tadawul) from 1st January 2000 to 31st August 2017. Using the buy-and-hold abnormal return method, the present study finds that the acquirer companies' shares for the cash payment method continues to outperform their counterparts of non-cash payment against the equal-weighted and value-weighted indexes. The presence of abnormal return opportunities that may be exploited by investors in the three-year holding period following the completion of M&A events might provide valuable insight to individual and institutional investors. As there is no national evidence on share performances of acquirer's companies over the long-run period, the present findings add to a growing body of M&A literature

Emerging Markets: Evaluating Graham's Stock Selection Criteria on Portfolio Return in Saudi Arabia Stock Market

Graham's stock selection criteria enable investors to be more cautious in selecting their portfolios in order to generate abnormal return. Graham's model was widely examined in various developed market where the stock markets and companies are more mature and economy of the countries are more stable. However, the selection criteria model was not commonly examined in emerging countries despite of their rapid economic growth and diversified sectors in the stocks trading. Hence, this study attempts to investigate the relevance of Graham's stock selection criteria on the portfolio returns of the Saudi Arabia stock market. Saudi Arabia represents the fastest growing market in the Middle East primarily AGCC region thus testing the market is justified. The study found that despite of being young and immature stock market, Saudi stock market was able to offer abnormal return to the investors and Graham's model of stock selection is indeed valuable to investors. Keywords: net current asset value, Benjamin Graham, value investing JEL Classification: G1

Arrangers’ identity and the syndicate structure of sukuk

The participation of multiple banks and financial institutions in a sukuk (Islamic bonds) issuance reflects a successful process of negotiation of contract terms between the issuer, lead arranger, and other financial institutions. Conventional finance literature suggests that certain banks or non-bank institutions possess unique characteristics that give them a competitive advantage in screening and monitoring debt contracts. Whether or not their uniqueness contributes to the structure of sukuk syndicate is still an empirical question. Therefore, this paper examines the relation between arranger identity and the structure of sukuk syndicate for a sample of 3,462 sukuk tranches. Results of multiple Poisson regressions indicate the certification effect of arrangers where more reputable banks are associated with a larger syndicate size (the number of participant financial institutions). Non-bank institutions are also positively related to the size of syndicate, and this relation is more pronounced for private firms. This implies that such institutions are gaining specialization in screening and monitoring risky contracts. Further, Islamic financial institutions (IFIs) play a limited role in sukuk syndication. One promising avenue for IFIs to build their capacity to assume the role of lead arranger, as the results suggest, is to actively engage reputable conventional banks and non-bank institutions in their syndicated financing activities

Indonesian Omnichannel Banking: How Far Do Governing Laws Protect Customer's Data Privacy

In the digital transformation era, banks have been working to implement a digital strategy that will lead to lower costs, better service, higher profitability, and the desired level of customer satisfaction. Utilising marketing technology for consumer engagement is essential to bringing in more customers without increasing costs. Omnichannel is the marketing strategy that offers more services to customers by having them interact with it across all available physical and digital channels at any time, resulting in higher customer satisfaction and loyalty. Customer data is significant information that may be used at any stage of the digital marketing process. The Protection of Personal Data Act of 2022 and the Act of Development and Strengthening of the Financial Sector of 2023 govern consumer data protection at all stages of marketing activities, including data processing, profiling, and collaboration with other organisations. This study reviews how far the governing laws can protect consumer private data in utilisation in the company's digital marketing program to boost utilisation of the company's omnichannel approach. The study discovered that governing laws can protect the customer's private data in the banking omnichannel approach. Customer data are governed clearly and strongly by the regulations at all marketing program phases that could potentially be exploited, so both laws will be able to prevent illegal activities of customer data optimally in the future. Lastly, customer approval is critical for the Bank's use of all customer data

Arrangers’ Identity and the Syndicate Structure of Sukuk (Identiti Pengatur dan Struktur Sindiket Sukuk)

The participation of multiple banks and financial institutions in a sukuk (Islamic bonds) issuance reflects a successful process of negotiation of contract terms between the issuer, lead arranger, and other financial institutions. Conventional finance literature suggests that certain banks or non-bank institutions possess unique characteristics that give them a competitive advantage in screening and monitoring debt contracts. Whether or not their uniqueness contributes to the structure of sukuk syndicate is still an empirical question. Therefore, this paper examines the relation between arranger identity and the structure of sukuk syndicate for a sample of 3,462 sukuk tranches. Results of multiple Poisson regressions indicate the certification effect of arrangers where more reputable banks are associated with a larger syndicate size (the number of participant financial institutions). Non-bank institutions are also positively related to the size of syndicate, and this relation is more pronounced for private firms. This implies that such institutions are gaining specialization in screening and monitoring risky contracts. Further, Islamic financial institutions (IFIs) play a limited role in sukuk syndication. One promising avenue for IFIs to build their capacity to assume the role of lead arranger, as the results suggest, is to actively engage reputable conventional banks and non-bank institutions in their syndicated financing activities

The impact of social media marketing activities on customer purchase intention: a study of the property industry in Malaysia

Purpose This study investigates the impact of social media marketing activities on customer purchase intention in the Malaysian property market. Design/methodology/approach The study utilises a survey research approach to collect data from 331 respondents using a questionnaire. Findings The findings of the study reveal that entertainment, interaction, customisation and word-of-mouth variables had a significant and positive impact on customer purchase intention in the Malaysian property market. However, the study demonstrates a positive but insignificant impact of trendiness on customer purchase intention. Research limitations/implications First, the study relies on a sample of 331 respondents in Malaysia, which may limit the generalizability of the findings to a broader population. Hence, future research could aim for a more extensive and diverse sample to enhance the validity of the results. Second, while the study identified significant relationships, the measurement of variables, in particular “trendiness,” could be refined for better accuracy. The future study may consider including a more precise measurement to provide comprehensive insights. Practical implications The results suggest that marketers should focus on creating engaging and interactive content, providing personalised experiences and leveraging word-of-mouth recommendations to enhance customer purchase intention. The overall findings highlight the importance of social media marketing activities in the property market and their potential to drive customer purchase intention. Social implications The study contributes to the existing literature by shedding light on the role of social media marketing activities in influencing customer purchase intention in the Malaysian property market. Originality/value To the best of the authors’ knowledge, there is no similar studies have been conducted in this area of research

Machine learning In the financial industry: A bibliometric approach to evidencing applications

AbstractThis study comprehensively reviews the key influential and intellectual aspects of machine learning in finance. The authors employ the bibliometric approach using VOSviewer software to analyse 189 academic articles from the SCOPUS database between 1988 and December 2022. Our results revealed that machine learning in the finance literature has significantly increased since 2017, indicating that the finance industry had some time to adopt newer technology. The authors find that the United States, China, and the United Kingdom were the countries that most frequently investigated this topic. It was also found that the Steven Institute of Technology (New Jersey, United States) is the most active research institute in this field. We also discovered that the application of machine learning has been adopted in crowdfunding, FinTech, forecasting, bankruptcy prediction, and computational finance. Our research is subject to several limitations. This research only utilised the SCOPUS database and was restricted to articles written in English. Our findings assist academic scholars in exploring issues related to machine learning in finance in future studies. The outcomes of the present study may also guide market participants, particularly FinTech and finance companies, on how machine learning could be used in their decision-making