The Impact of Financial Performance of Stock Prices of Jordanian Islamic Banks (During Period From 2010 to 2018)

Abstract

This study aims to identify the impact of financial performance of stock prices of Jordanian Islamic Banks which are listed on the ASE. In order to achieve the goal of this study, the researcher collected and analyzed data from two banks, as a study sample, during the period (2010-2018), using the panel data method. The study the measures the financial performance in financial ratios which were represented in (return on assets, return on equity, change in earnings per share) and were measured at stock prices. The results of the study showed that there is a discussion of the results of the main variable. Based on the results of the previous statistical tests, it was found that there is a significant statistical significance between the financial performance of the Islamic banks represented by (return on assets, return on equity, change in earnings per share); therefore, we believe that this result is consistent with economic studies and financial and market analyzes, therefore, stock prices are an indicator of the health of growth in the financial markets, and evidence of stock prices for banks which constitute the basis of stability and the functioning of markets, all due to the profitability of banks and stability of financial performance. The researcher recommended that the Jordanian Islamic banks seek to increase their profits and improve their financial performance and strive for excellence in their activities in order to win the trust and preservation of customers. He also recommended Islamic banks to distribute dividends on a periodic basis to shareholders and encourage them to keep shares instead of selling, which leads to the evaporation of those banks.

Analysis of islamic banking financial performance before, during and after global financial crisis

“…Islamic banking was believed to survive during this financial crisis. This is because of the characteristics of Islamic banks that prohibit usury and do not involve in financial derivatives (Al-Qadi, 2012). Islamic banks can maintain their performance although they are also affected by the crisis but their performance is better than conventional banks (Shafique, Faheem, & Abdullah, 2012).…”

“…Several previous studies have examined the performance of Islamic banks during the crisis. They argue that it is important to learn why Islamic banking system has less impact from global financial crisis compared to conventional banking system (Al-Qadi, 2012;Shafique et al, 2012). Further, this crisis even increases the popularity of Islamic finance including Islamic banking (Fa-Yusuf, 2016).…”

Disproportions in the Description Ability of Prediction Models for Change in the Accounting System

“…On the contrary, a study carried out between 2012 and 2020 on French companies suggests that the adoption of IFRS has no effect on changing the financial performance of companies [3]. Research on the implementation of IFRS was also carried out in the case of Jordanian Banks, where they analyzed the indicators return on assets, return on equity, change in earnings per share [4]. A study analyzing the effect of IFRS on Nasdaq listed companies found that more than 60% of companies achieved a statistically confirmed increase in assets and liabilities.…”

The Effect of ESG Score, Financial Performance, and Macroeconomics on Stock Returns during the Pandemic Era in Indonesia

“…The empirical studies related to ESG issues in developing countries is the dedication of shareholders to making investments as a sustainable development effort (Diouf et al, 2016;Meher et al, 2020;Miralles-Quirós et al, 2018;Przychodzen et al, 2016;Saini and Singhania, 2019). Many studies examined the effect of variables that affect stock returns, which can be significantly influenced by financial performance (Iqbal et al, 2013;Heryanto 2016;Lai and Cho 2016;Mahmoudabadi 2017;Tahir and Gul 2019;Al-Qudah 2020). The different results found that financial performance does not significantly affect stock returns (Kurniati 2019;Ozturk and Karabulut 2020;Endri et al, 2021).…”