الكتب

A stock market performs a number of important roles in the economy. As a financial intermediary, it enables firms to raise capital. In developing countries implementing privatization, share issues in domestic and international markets, has been the second most commonly used method after direct sales. A stock market also helps promote growth and employment by providing finance to businesses, which would have had difficulty raising funds otherwise. From the investorsâ?? perspective, a stock market provided them with an opportunity to diversify their portfolio of assets and thus reduce their risk. A stock market is also important in that it performs both a screening and a monitoring role. Any new information on a listed company will be quickly discounted into the stock price, which may indicate profitable investment opportunities. Stock price changes also assist in monitoring the performance of managers of companies listed on a stock market.

Traditionally, studies on stock markets have focused on developed markets. The issue most often tackled in these studies has been that of the efficient market hypothesis (EMH), which is the idea that prices of securities quickly and fully reflect all available information. This issue is of primary importance to investors because if a market is characterized as efficient, the likelihood is that no investor can earn abnormal returns.

Over the last decade, researchers have given a growing attention to the emerging markets, which have seen their share of world markets increase noticeably. While the issue of efficiency remains dominant in the studies on these markets, that of their integration is also attracting great interest. This issue involves the idea that if a market is not integrated in international markets, there are diversification opportunities for investors.

Regarding Arab stock markets, there is still a significant lack of studies on issues relevant to the investment decision. This may be due to the fact that some of these markets are not yet fully accessible to international investors and/or that detailed information is not yet available to the level researchers and investors are accustomed to in other markets. Whatever the obstacles to research on Arab stock markets may be, much can still be done under the current circumstances.