Could you have ever imagined any connection between Ramadan and the performance of stock markets?  As surprising as it may be, a recent study revealed that in countries with a majority of Muslims, the stock market returns were nine times higher in Ramadan as compared to the other months.  The findings of this study also show that market volatility decreased during this time too.  Wow! Of all the benefits of Ramadan, this has got to be the most unique.

Ahmad Etebari (University of New Hampshire, US), JedrzejBialkowski (University of Christchurch, New Zealand), and Tomasz Piotr Wisniewski (University of Leicester, UK) conducted an eighteen year-long study from 1989-2007 and discovered this surprising correlation.  They concluded that positivity in the psychology of investors during Ramadan is one of the primary reasons for the hike in stock market performance.  Interestingly, the same performance wasn’t observed in non-Muslim countries for the same period.

“According to the new research findings, the heightened sense of social integration and possible salubrious effects of the changed dietary regimen may influence the sentiment of the investing public.”

How is it possible?

Well, it may not be as surprising as you think.  Many contemporary theories suggest that varied factors such as weather, environment and emotions affect the financial decisions made by people.  Religion is generally considered to be separate from other more empirical and physical aspects of life.  However, here are three scientists telling us that there is more to religion than just rituals and metaphysical stuff.

“As a fundamental, shared experience, Ramadan brings about a greater solidarity and cooperation among Muslims throughout the world. A major contributor to this effect is the greater social support provided within the community and also the closer relationship an individual Muslim establishes with Allah, which in itself is a critical form of social relation. As indicated by research in positive psychology, religion provides a valuable form of social support, encourages optimisticbeliefs, and contributes to the believers’ happiness (Beit-Hallahmi and Argyle, 1997). The collective enthusiasm derived from Ramadan leads to a heightened sense of social identity and greater satisfaction with life for Muslims around the world. This satisfaction, in turn, may conceivably lead to optimistic beliefs that extend to the investment decisions of the followers.”

It is interesting to see that this whole research is filled with evidence after evidence of the positive impact of Ramadan and fasting.

“Clinical research shows that the Ramadan fasting generally makes people less tense and anxious (Daradkeh, 1992) and that it may also induce mild states of euphoria (Knerr and Pearl, 2008).”

This study puts a lot of emphasis on the health benefits of fasting and then traces its impact on the performance of financial markets.

How about a tip to make your environment more relaxing so that you can also make some good investment decisions.  According to, “your home garden can be an ideal place for prayer or relaxation. Offer your prayers and tarawih in solitude in this relaxation oasis and feel it penetrate deep inside your soul. You can also use an old curtain or a blanket to make your hanging hammock.”

Don’t Get Carried Away with All the Talk about High Returns

So, does this mean investors in Muslim countries should start fasting more so that they can get deenand dunya?  Of course this is not what it’s all about; the impact of fasting on stock market is tied to the overall environment in Muslim countries during Ramadan.  The feeling of closeness, solidarity, a realization of the suffering of the marginalized members of the community and more focus towards akhirah are all contributing factors, which are not present in individual fasting.

While we discover more and more benefits of fasting in Ramadan, we should always make sure that we perform this ibadah only because Allah (SWT) has commanded us to do it and we want to please him.  Any benefits experienced from fasting are a just a bonus.

Prophet (SAW) said, “Allah said, ‘All the deeds of Adam’s sons (people) are for them, except fasting which is for Me, and I will give the reward for it.’ Fasting is a shield or protection from the fire and from committing sins. If one of you is fasting, he should avoid sexual relation with his wife and quarreling, and if somebody should fight or quarrel with him, he should say, ‘I am fasting.’ By Him in Whose Hands my soul is’ The unpleasant smell coming out from the mouth of a fasting person is better in the sight of Allah than the smell of musk. There are two pleasures for the fasting person, one at the time of breaking his fast, and the other at the time when he will meet his Lord; then he will be pleased because of his fasting.”

The research paper is available at:

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