Assessing the Role of Islamic Calendar Anomalies: Qualitative Perspective of Pakistani Investors

Abstract

This research aims to explore the perceptions of investors regarding Islamic calendar anomalies and their influence on investment decisions within the Pakistan Stock Exchange. To achieve this, the study employs a qualitative methodology involving 10 face-to-face structured interviews with brokers at the Pakistan Stock Exchange (PSX). The findings indicate that investors are not only aware of Islamic calendar anomalies but also actively consider them when making financial decisions, particularly during the months of Muharram, Safar, Ramadan, and Zil Hajj. Notably, Ramadan is identified as having the most significant positive impact on trading patterns, as many investors believe it to be a month of blessings, which influences their trading behavior. In contrast, the month of Safar is perceived negatively, with many investors choosing to avoid investments during this period due to prevailing cultural beliefs. Additionally, the study highlights the important role of investor sentiment in shaping price movements of stocks and trading behavior, highlighting the interplay between psychological factors and market dynamics. The implications of this research extend to both investors and market practitioners, as it provides valuable insights into how awareness of Islamic calendar anomalies can inform the strategies of investment, optimize the trading decisions, and enhancing the risk management practices in the context of the Pakistani financial market.