Do financial and non-financial stocks hedge against lockdown in Covid-19? An event study analysis

Abstract

The novel Covid-19 virus has changed the dynamics of 'flight to safety' investment for various economies. Thus, the hedging ability of the stocks must be revisited in the scenario of this pandemic. For this purpose, specifically understanding the importance of a semi-strong form of an efficient market hypothesis is important. This was to observe the speed at which the markets react to the news announcement, and how rapidly they absorb new information to regain thier position in the market. Hence, this study conducts an event study analysis on Pakistan's emerging market to detect the financial and non-financial stock price reactions towards the lockdown announcement, following the spread of Covid-19 in Pakistan. The daily data on the KSE-100 index for thirty different industries, comprising of ninety firms, spanning from December 12, 2019, till June 7, 2020, was collected and analyzed. The abnormal returns were recorded to be at around 21 [À10. þ10] and 41 days [À20, þ20] event window, around the day of the lockdown announcement. These abnormal returns were obtained through the market model regression. The data collected implied that most of the industries were stable and behaved well before the event day, while the affected sectors recovered fairly quickly. Therefore, it has been affirmed that Pakistan's equity portfolios are informationally efficient, and can benefit the investors during a pandemic.

Effects of Smart City Construction on the Quality of Public Occupational Health: Empirical Evidence From Guangdong Province, China

“…Table 3 reports the baseline regression results based on Formula (1). Without controlling other factors, columns (1) and (2) show that the coefficient of smart city construction is negative, and the significance levels are 1% and 5%, respectively, indicating that smart city construction is powerful in promoting the quality of public occupational health. This article continues to introduce six control variables to obtain columns (3) and ( 4).…”

“…Urban issues (such as traffic, environment, housing, employment, public safety, and health) are prevalent in cities worldwide. These problems have begun to seriously affect the sustainable development of the economy and the quality of life of human beings ( 2 ). With the gradual maturity and wide application of internet technology, human beings have stepped into the era of knowledge networks.…”

The COVID-19 Pandemic and Economic Growth: Theory and Simulation

“…The restriction of infectious diseases on the accumulation of human capital is an important reason why many underdeveloped countries are unable to achieve economic growth. And the financial markets are also subject to the COVID-19 pandemic (21).…”

Influence of Perceived Risk of Blockchain Art Trading on User Attitude and Behavioral Intention

“…In addition to gold capital increasing with hedging risk [97], Bitcoin investment has also climbed. Due to the complementary relationship between Bitcoin and gold [98] and the tendency toward safe investment during the pandemic period [99], Bitcoin, which is owned in a digital wallet, has become a popular choice among diversified asset portfolios, thereby greatly enhancing the willingness of consumers to use blockchain technology. Therefore, economic policy uncertainties caused by the pandemic may also be one of the variables influencing the use of blockchain technology.…”