Impact of the COVID-19 pandemic on banking and financial sector stock returns

Mahnoor Hanif (), Majdi Hassan (), Basma Henchiri () and Muhammad AlDaas ()

International Journal of Accounting, Business and Finance, 2022, vol. 1, issue 2, 19-35

Abstract: Using the Indian banking and financial services stocks, this study set out to examine the impacts of the global pandemic and government measures on the stock returns around four pandemic-related events. This study employs the event study methodology with the market model estimation for a 210-day estimation window [-214,-5] and a 15-day event window [-4,+10]. The reaction was mild to the announcement of 'Health Emergency of Global Concern', but as soon as the coronavirus outbreak was declared a 'global pandemic', the market reacted significantly. Further, due to the expected economic stimulus, the Reserve Bank of India's financial measures resulted in a positive response from the market. The public and private sector banks are almost non-reactive to the first event. The findings deny that with the available prices, during an event, abnormal returns are impossible. The analysis results make it easier for them to formulate sustainable policies and constitute a high-yield moderate-risk portfolio during such emergencies.

Keywords: Global pandemic; Event study; Market model; Emerging market; Returns. (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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