The impact of COVID ‐19 on Karachi stock exchange: Quantile‐on‐quantile approach using secondary and predicted data

Abstract

During the pandemic, the stock markets of developed countries have reported a jittery trend. The current study focuses on the impact of COVID-19 on Pakistani stock market, which belongs to a developing economy. The findings of current study have contradicted with the previous studies, which reported an adverse effect of COVID-19 on developed stock markets. We conclude that KSE-100 index has confirmed positive increment in stock returns. In addition, by using three predicted scenarios of COVID-19, we report the significant increase in KSE-100 index. However, it seems clear that the timely intervention of Pakistani government has safeguard the investors from utter disaster of stock market.

Contemporary research on spillover effects of COVID-19 in stock markets. A systematic and bibliometric review.

“…Small firm's returns did not respond positively to stimulus package announced by Fed in US as compared to large firms [65]. Pakistan stock market initially dipped due to COVID-19 but after announcement of relief package by Government of Pakistan for industries and huge cut in interest rate by State Bank of Pakistan resulted in positive returns from Pakistan Stock Exchange [66]. Wagner [67] discussed the soft targets of COVID-19 in stock markets as Companies with high debts racked in their liability side of balance sheets and low cash in assets.…”

Assessing the Impact of COVID-19 on Corporate Investment Behavior

“…The different economic sectors including manufacturing, service, and financial sectors suffer from negative growth rates. Their financial impairments could be more than as estimated by analysts [14]. Almost all business operations i.e., production process and buying of raw material and selling of final products were affected during this era due to lockdown policy, which limited the movement of humans and reduced the consumption rate.…”

“…According to statistics, period has a significant and negative impact on corporate investment behaviour. Irrespective of steps taken by the Government of Pakistan against the spread of virus and to sustain the growth of industrial sector [14], but it is evident from statistics that productive use of fixed assets (PPE) has diminished due to less demand for industrial products. This factor eventually discourages firms to make an active investment in fixed assets.…”

Impact of COVID-19 on the performance of emerging market mutual funds: evidence from India

“…The methodology is better to capture both cross-sectional, as well as time-series variation [ 7 ]. Waheed et al [ 45 ] analysed the impact of COVID-19 on the KSE100 index using quantile-on-quantile estimations. The study was conducted for 2 months from 26 February to 17 April 2020.…”