This paper reports stock return changes induced by credit rating revisions disclosed by credit-rating agency in one stock market, where there is a list of special stocks. Do stock prices ofShariah-compliant special firms react to credit rating disclosures? There is a rich literature on credit rating revisions affecting rated firm's stock prices, not the special stocks. The findings reported in this paper suggest stock prices react significantly to credit change disclosures. We also find the average change in the special stock price returns significantly correlated with four key firm-specific variables: two working capital ratios, leverage and profit margin. These findings offer evidence that the special common stocks traded in several key world stock markets could have similar price reactions to credit rating change disclosures in line with the effects known for ordinary common stocks studied to-date. The findings reported here may prompt further studies on other special stocks in other markets.
展开▼
