A coronavirus outbreak and sector stock returns: a tale from the first ten weeks of 2020

Nguyen, Khoa Huu

doi:10.1080/13504851.2021.1961116

Cited by 8 publications

(7 citation statements)

References 18 publications

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“…Finally, when compared to smaller enterprises, larger enterprises experience significantly greater negative effects on returns. Nguyen (2020) extends the research by demonstrating that shareholder responses to COVID 19 differ between nations and sectors. Communication, consumer goods, medical services, information technology and infrastructure are performing fairly well compared to other industries in all nations except the USA, Japan and Italy, whereas the energy sector has suffered the most in all countries.…”

Section: Capital Markets Response To Covid 19 Pandemicsupporting

confidence: 54%

“…The volatility index (VIX) has also risen dramatically due to the pandemic. When linked to prior high-risk events like 9/11 (41.75), the financial meltdown of 2008 (46.72), the US economic crisis of 2011 (48) and the most current US-China trade tensions in 2018 (36.06), the COVID 19 virus, with a VIX score of 84.57, is considered as a big source of anxiety for the markets (Nguyen, 2020). It is reasonable that the COVID 19 threat has been viewed as extraordinary, given that, although the Spanish Flu took about a year to become a global pandemic, COVID 19 took just three months to reach global, and only two months for the key centers of industrialization to be impacted (Robinson, 2021).…”

Section: Introductionmentioning

confidence: 99%

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Asian perspective of capital market performance amid the COVID 19 pandemic

Adnan

2022

AJAR

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PurposeThe purpose of this research is to investigate the short-term capital markets' reactions to the public announcement first local detection of novel corona virus (COVID 19) cases in 12 major Asian capital markets.Design/methodology/approachUsing the constant mean return model and the market model, an event study methodology has been implied to determine the cumulative abnormal returns (CARs) of 10 pre and post-event trading days. The statistical significance of the data was assessed using both parametric and nonparametric test statistics.FindingsFirst discovery of local COVID 19 cases had a substantial impact on all 12 Asian markets on the event day, as shown by statistically significant negative average abnormal return (AAR) and cumulative average abnormal return (CAAR). The single factor ANOVA result has also demonstrated that there is no variability among 12 regional markets in terms of short-term market responses. Furthermore, there is little evidence that these major Asian stock market indices differ significantly from the FTSE All-World Index which might suggest possible spillover impact and co-integration among the major Asian capital markets. The study further discovers that market capitalization and liquidity did not have any significant impact on market reaction to announcement.Research limitations/implicationsThe study's contribution might have been compromised by the absence of socio-demographic, technical, financial and other significant policy factors from the analysis.Practical implicationsThese findings will be considerably helpful in tackling this unprecedented epidemic issue for personal and institutional investors, industrial and economic experts, government and policymakers in assessing the market in special circumstances, diversifying risk and developing financial and monetary policy proposals.Originality/valueThis paper is the first to examine the effects of local COVID 19 detection announcement on major Asian capital markets. This study will add to the literature by investigating unusual market returns generated by infectious illness outbreaks and the overall market efficiency and investors' behavioral pattern of major Asian capital markets.

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Section: Capital Markets Response To Covid 19 Pandemicsupporting

confidence: 54%

Section: Introductionmentioning

confidence: 99%

Asian perspective of capital market performance amid the COVID 19 pandemic

Adnan

2022

AJAR

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“…Fu and Shen analyzed the impact of COVID-19 on the performance of companies in the energy industry and found that there was a significant negative impact (Fu and Shen, 2020). The energy industry seems to be viewed by some analysts as being the most affected by the coronavirus pandemic (Nguyen, 2020;Ramelli and Wagner, 2020). Whereas, at least by some measures, the impact on other industries, such as the tourist and aviation industries was far greater.…”

Section: Literature Reviewmentioning

confidence: 99%

WTI Crude Oil Options Market Prior to and During the COVID-19 Pandemic

Łamasz

Michalski

Puka

2023

IJEEP

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The COVID-19 pandemic has caused turbulence in many areas of the global economy. It also contributed to an increase in volatility on the energy commodities market. This spilled over into the derivatives market, particularly the crude oil futures market. The aim of the article is to compare the costs and effectiveness of using options on WTI oil from before and after the pandemic. The analyzes took into account the value of option premiums and final results obtained by buyers of call options from March 1, 2018 to April 14, 2022. The results showed that buyers of call options during the pandemic, despite paying much higher option premiums, experienced significantly higher payouts and rates of return. They were the highest for options with the longest expiry periods of 21-30 days. Research also showed that during the pandemic, options with strike prices set at a level higher than the price of oil on the contract date had particularly high rates of return, while the highest payout values were achieved by buyers of call options with low strike prices.

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“…He et al (2020) explored the responses of Chinese firms from different industries to the COVID-19 pandemic by using an event study approach. Nguyen (2021) examines impacts of COVID-19 outbreak on stock returns of 11 sectors from 10 countries. The results show that Although China is the origin of the virus, the negative effect on its stock market seems to be the least severe while France, Spain, Germany, the U.K. and Italy suffered the most losses.…”

Section: Literature Reviewmentioning

confidence: 99%

“…, 2020) this study tested the effect of COVID-19 outbreaks advertising on stock returns listed in the index EGX100. Secondly, the use of a new methodology analyzes three results, which is the method of the event study based on language R. Finally, prior studies showed that COVID-19 has essential effects on stock returns (Ashraf, 2020; Al-Awadhi et al ., 2020; Bash, 2020; Nguyen, 2021). Our research confirmed the inefficiency of the Egyptian market at the semistrong level, as the declaration of COVID-19 has an insignificant negative effect on stock exchange returns, adding to the existing literature.…”

Section: Introductionmentioning

confidence: 99%

The effect of the COVID-19 announcement on stock returns: evidence from Egypt

Elgharib

2023

AJEMS

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PurposeThis study aims at testing efficiency of the Egyptian stock market at semi-strong level through exploring the impact of the COVID-19 outbreak on Egyptian stock returns.Design/methodology/approachThe author applied the “Event Study” method that addresses the impact of a particular event or group of events on stock returns, from 12 September 2019 to 5 April 2020, choosing Egyptian Stock Exchange (EGX) 100 companies which constitute constitutes the highest-level 100 companies in terms of liquidity and activity.FindingsThe study found inefficiency of the Egyptian stock market at the semistrong level, as the declaration of the COVID-19 has a negative insignificant effect on stock returns, whether on the day of the declaration, before or after it, The underlying reasons for these results can be referred to the idea that can be explained that investors are noise trading when making their investment decisions.Research limitations/implicationsThere are two limitations to the interface of this paper. The first one is the short-term impact of COVID-19, using 141 days, and then it is not clear in the research the long-term impact of events related to the epidemic. Secondly, because the author deals with a short period term, the author does not test the characteristics of the company or any other major events that may affect the stock returns of the companies under study.Originality/valueThis adds to the finance literature on the impact of the COVID-19 announcement on stock returns in the context of African countries. The explanation of the interconnection of the COVID-19 announcement on stock returns in Egypt.

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A coronavirus outbreak and sector stock returns: a tale from the first ten weeks of 2020

Cited by 8 publications

References 18 publications

Asian perspective of capital market performance amid the COVID 19 pandemic

Asian perspective of capital market performance amid the COVID 19 pandemic

WTI Crude Oil Options Market Prior to and During the COVID-19 Pandemic

The effect of the COVID-19 announcement on stock returns: evidence from Egypt

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