How COVID-19 impacts Vietnam’s banking stocks: An event study method

Abstract

The banking industry is one of the major industries in the Vietnamese stock market, so understanding how the industry index reacts to unusual events such as COVID-19’s impact is very important for the development of the Vietnamese stock market. This study examines the response of the banking sector index to three lockdown/blockage announcements to prevent the COVID-19 epidemic in Vietnam in 2020. Three times of lockdown/blockage: On February 13, 2020, blockade of Son Loi commune, Vinh Phuc province; on March 30, 2020, Vietnam announced the nationwide epidemic of COVID-19 and then nationwide lockdown, and on July 28, 2020, blockade in Da Nang. In the first case, the abnormal returns changed the sign around the notification date indicating that the stock price deviated from its fair value, but accumulating abnormal returns CAR (0;3] and CAR (0; 2] are both positive and statistically significant, which means that investors are more secure when the epidemic area is tightly controlled. The nationwide lockdown was the event that had the strongest impact on the stock price when both AR and CAR were negative and statistically significant before and after the date of the event’s announcement. Nationwide lockdown was the event that had the strongest impact on stock prices as both AR and CAR were negative in the days before and days after the event. This result supports the theory of imperfect substitution. Only AR [2] was positive and statistically significant, showing that the blockade event in Da Nang had a slight impact on the banking sector’s stock price.

How Covid19 affects the stock return of the Vietnamese pharmaceutical industry: event study method

“…Therefore, unlike Mittal, Sharma (2021) which uses the first reporting date of Covid-19 death in India as the event date, this study uses two event days including: time of identification of the first patient infected with Covid-19 virus and the timing of the discovery of patients that have the spread of disease in the community are the event dates. In addition, similar studies in China stock market (Al-Awadhi et al 2020;He et al 2020), India (Mittal, Sharma 2021), Australia (Alam et al 2020) and Vietnam (Phuong 2021) have chosen the time of the outbreak of Covid-19 in the countries to be the event date, this article also selects the date when Vietnam announced the outbreak of Covid-19 as the date of the event.…”

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“…Additionally, Phuong (2021) analyzed the response that firms within the Vietnamese banking sector displayed to 3 lockdown announcements in 2020 during the height of the COVID-19 epidemic in the country. Secondary data were obtained and analyzed using appropriate statistical tools.…”

Impact of commodities and global stock prices on the idiosyncratic risk of Bitcoin during the COVID-19 pandemic

“…The negative impact of the COVID-19 pandemic on the real economy was felt at the global, regional, and local levels with devastating effects on employment and economic growth around the globe (Danylyshyn, 2020; Ozili & Arun, 2020; Sansa, 2020). There is evidence that the COVID-19 pandemic had a negative impact on traditional financial assets in different countries in Asia (Phuong, 2021). Finally, Ozturk and Cavdar (2021) argued that, in times of an exogenous systemic shock, such as the COVID-19 pandemic, there was an increase in volatility spillovers between Bitcoin and the currency and oil markets.…”