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The Impact of Global Financial Crisis 2008 on Amman Stock Exchange

The Impact of Global Financial Crisis 2008 on Amman Stock Exchange

The Journal of Distribution Science(JDS) / The Journal of Distribution Science, (P)1738-3110; (E)2093-7717
2012, v.10 no.7, pp.13-22
https://doi.org/https://doi.org/10.15722/jds.10.7.201207.13
Ajlouni, Moh'd Mahmoud (Department of Banking and Finance, Faculty of Economics, Yarmouk University)
Mehyaoui, Wafaa (Department of Commercial Sciences, Faculty of Economic, Management & Commercial Sciences, Oran University)
Hmedat, Waleed (Department of Economics, Faculty of Economics, Yarmouk University)
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Abstract

The effect of the September 2008 global financial crisis weighed heavily on stock markets around the world. The purpose of this study is to empirically investigate the impact of the crisis on Amman Stock Exchange. Event study methodology has been adopted on a period of 24 months, from January 2008 to December 2009. Monthly average abnormal returns across a sample of 52 industrial and services companies have been tested separately. The results reveal that Amman Stock Exchange experienced significant negative abnormal returns in the fourth quarter of the year 2008. However, there were no significant abnormal returns observed thereafter. This means that Amman Stock Exchange managed to overcome its adverse consequences. Since the event study tests for market efficiency, as well, the results show that Amman Stock Exchange reaction is consistent with the semi-strong form of the efficient market hypothesis.

keywords
Global Financial Crisis (GFC), Amman Stock Exchange (ASE), Event Study, Efficient Market Hypothesis (EMH)

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