This study inspects the effects of political and financial events on the stock prices of Islamic banks which are listed in KSE 100. Some of the main political and financial events are chosen from particular time span. The daily data are used for the period of Jan, 2007 to Dec, 2018. The GARCH model is employed to model the volatility and return series. The Impulse Indicator Saturation (IIS) is employed to measure the effects of political and financial events on the returns and the volatility of Islamic banks. The data revealed that 19 out of 21 political and financial events impacted the returns and the volatility of Islamic banks. While there is only 2 political events out of 18 that have insignificant effect on the returns and the volatility of Islamic banks. The state and Islamic banks can use these results to build an effective policy regarding Islamic banking sector. Supervisor:- Dr. Saud Ahmad Khan