Title: COVID-19 PANDEMIC AND STOCK MARKET PERFORMANCE IN NIGERIA
Authors:
Oduyingbo, Babayemi Joshua, Danladi .D. Jonathan (Ph.D) and Falaye Motunrayo Helen
Abstract:
The objective of the study is to investigate the effects of the COVID-19 pandemic on stock market performance in Nigeria. The study relied on the data of the daily closing stock All Share Index (ASI), stock returns and the number of daily cases infected with COVID-19 and deaths cases, data were sourced from the Nigerian Stock Exchange and the Nigeria Centre for Disease Control websites covering a period of 6months (March 1, 2020, to August 31, 2020). The study employs the Vector Error Correction (VECM) model and Generalized Autoregressive Conditional Heteroscedasticity (GARCH) models.
The results of the VECM shows that stock market returns responded negatively to the growth in COVID-19 infected cases during the pandemic. The results of GARCH model confirmed the positive impact of COVID-19 pandemic on stock market volatility. The study concluded that Nigerian stock market responded quickly to the COVID-19 pandemic bad news; As practical policy implications for lowering COVID-19’s negative impact on stock market performance, Nigeria needs to place a greater level of importance on the stock market as a channel for monetary policy transmission and also investors are encouraged to uphold their investment conscience during trying times for the cushion effect of government preventive measures to stabilize the performance of the financial market.
Keywords: Covid-19, Garch, Pandemic, Stock Marketa.
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