How have COVID-19 Confirmed Cases and Deaths Affected Stock Markets? Evidence from Nigeria

Abu, Nurudeen; Gamal, Awadh Ahmed Mohammed; Sakanko, Musa Abdullahi; Mateen, Ana; David, Jesús; Amaechi, Ben-Obi Onyewuchi

doi:10.5709/ce.1897-9254.437

Cited by 18 publications

(19 citation statements)

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“…Given the fact that COVID-19 confirmed deaths come as a result of the virus infection, it follows that stock market participants must have reacted to the confirmed cases earlier than the documented deaths. Similar results are reported by various scholars, such as Abu et al [ 2 ], Ashraf [ 10 ], Al-Awadhi et al [ 4 ], Ru et al [ 30 ], Alber [ 5 ], among others, who documented that returns on stock markets appear to be more susceptible to confirmed COVID-19 cases than reported deaths. Our results, however, are contrary to findings in Babarinde [ 12 ], who document that all the measures of COVID-19 confirmed cases and deaths do not statistically and significantly explain stock prices in Nigeria.…”

Section: Resultssupporting

confidence: 88%

“…Most of the studies above focused on advanced economies and some developing and emerging market. In Nigeria, only few studies had assessed the impact of COVID-19 pandemic on stock market returns (see [ 2 ], Babarinde, et al 2020). Albeit, these studies only focused on how COVID-19 cases and deaths affect stock markets without taking into consideration the policy measures taking by government to contain the spread of the virus, the measures, especially the lockdown that have crippled the economic activities affect stock markets.…”

Section: Introductionmentioning

confidence: 99%

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Reaction of stock market returns to COVID-19 pandemic and lockdown policy: evidence from Nigerian firms stock returns

2021

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Given the effects COVID-19 pandemic on the financial sectors across the world, this study examined the reaction of stock returns of 201 firms listed in the Nigerian Stock Exchange to the COVID-19 pandemic and lockdown policy. We deployed both Pooled OLS and Panel VAR as estimation methods. Generally, the results from POLS show the stock market returns of the Nigerian firms reacted negatively more to the global COVID-19 confirmed cases and deaths than the domestic COVID-19 confirmed cases and deaths and lockdown policy. The results of the impulse response functions revealed that the effects of COVID-19 confirmed cases and deaths and lockdown policy shocks on stock returns oscillate between negative and positive before the stock market returns converge to the equilibrium in the long run. The FEVD results showed that growth in the COVID-19 confirmed cases, deaths and lockdown policy shocks explained little variations in stock market returns. Given our finding, we advocate for the relaxation of policy of lockdown and the combine use of monetary and fiscal policies to mitigate the negative effect of COVID-19 pandemic on stock market returns in Nigeria.

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Section: Resultssupporting

confidence: 88%

Section: Introductionmentioning

confidence: 99%

Reaction of stock market returns to COVID-19 pandemic and lockdown policy: evidence from Nigerian firms stock returns

2021

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“…The negative and positive effects of number of confirmed cases and number of deaths respectively on volume of stocks traded are both insignificant. However, the number of discharged cases exerts a negative and significant effect on volume of stocks traded for the banks, hence agrees with the apriori expectation.This is in agreement with the mixed results found by [24] and [25] but sharply contradict [13,1,8].…”

Section: Summary Of Findings Conclusion and Recommenda-tionssupporting

confidence: 92%

“…For obvious reason (newness of the covid pandemic) in Nigeria, few empirical research exist that examine effect of Covid-19 pandemic on stock prices and development in the capital market. [25] in a study to examine how Covid-19 deaths and cases impacted on activities in the Nigerian Stock Exchange (NSE) between March and September 2020 with ARDL and other econometric techniques, found that while confirmed cases of Covid-19 affected the market negatively, number of deaths positively affected it during the period. [26] conducted research aimed at ascertaining how covid-19 affected the Nigerian Stock Exchange from January to April, 2020 using the E-GARCH and Q-GARCH models.…”

Section: Literature Reviewmentioning

confidence: 99%

The COVID-19 Rages on: How did Nigerian Banks’ Stock React?

Temitope

Akinyemi

2021

AJEBA

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This study was carried out to examine how stocks of Nigerian deposit money banks (DMBs) reacted to the covid-19 pandemic from two perspectives: prices and volume traded on the Nigerian Stock Exchange. The effect of the pandemic on DMBs stock prices and traded volume was examined from three methodical areas: general effect, predictive effect and response to the covid-19 shock. Panel data of stock prices, volume of stocks traded of all the 15 listed Nigerian DMBs and monthly covid-19 data from February, 2020 to August, 2021 were analyzed with panel least square (PLS)s, panel vector autoregressive (PVAR) and impulse response function (IRF). These analytical methods were used to examine how covid-19 statistics, namely, number of confirmed positive cases, number of deaths due to the pandemic and number of discharged covid-19 patients affected Nigerian DMB’s stock prices and volume of stocks traded for the period under study. Results of the PLS revealed that while covid-19 positively affected stock prices of the banks, it negatively affected the volume of their stocks that were traded on the Stock Exchange. The PVAR results revealed that none of the covid-19 statistics examined exert long run predictive effect on stock price of Nigerian DMBs during the period, but the number of discharged patients and significantly had predictive affect volume of stocks traded. Both stock prices and volume traded responded swiftly to the shock from number of covid-19 confirmed cases and mildly to the fatalities and number of discharged patients. We conclude that, overall, the covid-19 pandemic significantly affected Nigerian DMB’s stock prices and volume traded and recommend that both banks and the NSE develop pandemic management strategies and invest more on technology driven stock trading facilities that will reduce the conventional brick-and-mortar trading during lockdowns.

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“…Hazem et al (2021) showed that the COVID-19 incidents had a negative impact on equity movement significantly, moreover, the U.S. lockdown and interest rate changes are the most affected by the G8 equity transactions, followed by Germany, France and the UK. Abu et al (2021) found that the number of confirmed cases of COVID-19 had a negative impact on stock market, however, the number of deaths had a positive one in the long-term. Nwosa (2021) indicated that COVID-19 had negative impacts on oil price, exchange rate and stock market performance in Nigeria.…”

Section: Existing Studiesmentioning

confidence: 95%

How and What Influences from COVID-19 Have Impacted Stock Prices and Exchange Rates? the Case of Japan

Kurihara

2021

IJAEFA

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This study reports the empirical analyzes of the COVID-19 on stock prices and exchange rates of Japan. Newly confirmed cases and death cases have significantly positive impacts on Japanese stock prices. One reason is that Japanese stock prices recently move together with U.S. stock prices. Under this situation, the U.S. could recover from the damage of COVID-19 ahead of other countries and its stock prices have increased hugely, so the effects on Japanese stock prices have been quite large. The rising of the U.S. stock prices have had a big influence so as to deny the adverse effects by COVID-19 in Japan. The other reason is that although the stock prices of tourism, food service, and so on were damaged in Japan, other industry stock prices have been increasing. The coefficients of declaration of the state of emergency/anti-infection measures are positive which denotes that the stock market may have taken the measure favorably. However, they are positive, but they are also insignificant. For the exchange rates, the newly confirmed case is significant and positive which means that it promotes depreciation of the Japanese Yen. It seems natural because if the situation of COVID-19 becomes serious, market participants consider investment in Japan as risky. Finally, both of the cases of confirmed cases and death cases of COVID-19 are negatively and significantly related with the flow of people. The coefficient of declaration of the state of emergency/anti-infection measures is negative, however, they are not significant to the flow of people.

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How have COVID-19 Confirmed Cases and Deaths Affected Stock Markets? Evidence from Nigeria

Cited by 18 publications

References 0 publications

Reaction of stock market returns to COVID-19 pandemic and lockdown policy: evidence from Nigerian firms stock returns

Reaction of stock market returns to COVID-19 pandemic and lockdown policy: evidence from Nigerian firms stock returns

The COVID-19 Rages on: How did Nigerian Banks’ Stock React?

How and What Influences from COVID-19 Have Impacted Stock Prices and Exchange Rates? the Case of Japan

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