Executing Financial Markets Analysis on Prominent Markets: A Case Study of (ASE) Amman Stock Exchange for Islamic Banks Shares in Jordan

Abstract

Purpose: This research purpose is to test the efficiency of Islamic banks’ shares in the Amman stock exchange (ASE) at the levels of the financial markets efficiency hypothesis, especially of the weak level, by implementing and executing the random walk theory on stock and shares prices and returns of Islamic banks in Amman stock exchange (2018-2022). Theoretical Framework: Through financial analysis of a well-known market, we investigate the effectiveness of the Amman Stock Exchange for Islamic banks' share prices when they are in a weak state. The results of this study will inform financial analysts and numerous banking investors about the best investment strategies and techniques they can use to make investments in Jordan's financial market and generate abnormal returns over time. Design/Methodology/Approach: ASE index is used in studying the behavior of shares prices and the monthly changes as percentages in the market index as a representative of returns of shares. Numbers and values test such as time series, cumulative average abnormal return, and other observations were conducted to figure out whether prices in the near future and returns, generally, can be predicted and expected by using and analyzing historical prices and returns. Findings: The findings and results of this research are clarified by prices of shares and returns for Islamic banks not supporting the random walk theory and weak form level of efficiency. Research, Practical & Social implications: The study's primary goals are to: Analyze and determine whether financial theories and market analysis are appropriate for the Jordanian Amman Stock Exchange, to gauge the levels of financial markets' effectiveness, and to give information on when financial investors can expect a typical or abnormal return from investing in the financial markets. Originality/Value: This research can be a source of help to financial analysts to earn knowledge about Islamic banks' shares and return on shares as well.