Measuring the Relationship between Market value Disclosure, COVID-19 Outbreak, and Profitability In Egyptian Listed Companies

Abstract

The main objective of the paper is to measure the relationship between the market value disclosure of Egyptian Listed Companies, COVID-19 outbreak, and profitability. Multiple linear regressions, paired sample t-test, cross tabulations analysis and chi-square test are used to measure such a relationship, to analyze the effect of industry type on profitability and market value and to test for the significance of differences of market values and profitability before (for the period ended December 31, 2019) and after COVID-19 outbreak (for the period ended March 31, 2020). Results show that the market value and profitability of Egyptian Listed Companies before COVID19 outbreak differs significantly from the market value and profitability after COVID19 outbreak. Results also show that industry type has a significant impact on the market value and profitability of Egyptian Listed Companies. Detailed analysis for every sector in the Egyptian stock Market shows that there is a negative relationship between market value of all Egyptian listed companies and COVID-19 outbreak. Results also show that there is a positive relationship between market value disclosure of Egyptian Listed Companies and profitability except for Trades and Distributions sector and Paper and Packaging Sector. These results have important implications for investors, practitioners and company management on how to stabilize performance during pandemic disease outbreaks by having fixed diversified portfolio of high-quality stocks and fixed-income investments.