 COVID caused a negative bubble. Who profited? Who lost? How stock markets changed?Numan Ülkü, Fahad Ali, Saidgozi Saydumarov and Deniz İkizlerli Pacific-Basin Finance Journal, 2023, vol. 79, issue C Abstract: Compiling a unique, worldwide collection of trading data, we analyze investor types' aggregate trading in stock markets throughout the COVID-19 episode, to assess investor types' role in a worldwide negative bubble and their degree of sophistication in responding to it. Individual investors were the main buyers and consequently the winners during the rebound. Foreign institutional investors exited host markets; some domestic institutions exploited the negative bubble by well-timed buying. In US index futures, asset managers heavily sold into crash; dealers profited from the rebound. Individual investors' buying was driven by their contrarian behavioral traits and a unique positive shock to retail investor demand for self-serviced investing in stocks, driven by work-from-home practices and unprecedented stimulus. This shock has changed the participant composition of world stock markets. Overall, the COVID-19 episode has many unique aspects that cannot be accounted for under existing theories. Keywords: Investor types' trading behavior; COVID-19; Negative bubble; Retail investors (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:79:y:2023:i:c:s0927538x23001105 DOI: 10.1016/j.pacfin.2023.102044 Access Statistics for this article Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee More articles in Pacific-Basin Finance Journal from Elsevier |
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