Financial Market Resilience in the GCC: Evidence from COVID-19 and the Russia–Ukraine Conflict

Farrukh Nawaz, Christopher Gan, Maaz Khan and Umar Kayani ()
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Farrukh Nawaz: Faculty of Business Studies, Arab Open University, Riyadh 11681, Saudi Arabia
Christopher Gan: Department of Financial and Business Systems, Faculty of Agribusiness and Commerce, Lincoln University, Christchurch 7647, New Zealand
Maaz Khan: Department of Management Sciences, COMSATS University Islamabad, Islamabad 45550, Pakistan
Umar Kayani: College of Business, Al Ain University, Abu Dhabi 112612, United Arab Emirates

JRFM, 2025, vol. 18, issue 7, 1-17

Abstract: Global financial markets have experienced significant volatility during crises, particularly COVID-19 and the Russia–Ukraine conflict, prompting questions about how regional markets respond to such shocks. Previous research highlights the influence of crises on stock market volatility, focusing on individual events or global markets, but less is known about the comparative dynamics within the Gulf Cooperation Council (GCC) markets. Our study investigated volatility and asymmetric behavior within GCC stock markets during both crises. Furthermore, the econometric model E-GARCH(1,1) was applied to the daily frequency data of financial stock market returns from 11 March 2020 to 31 July 2023. This study examined volatility fluctuation patterns and provides a comparative assessment of GCC stock markets’ behavior during crises. Our findings reveal varying degrees of market volatility across the region during the COVID-19 crisis, with Qatar and the UAE exhibiting the highest levels of volatility persistence. In contrast, the Russia–Ukraine conflict has had a distinct effect on GCC markets, with Oman exhibiting the highest volatility persistence and Kuwait having the lowest volatility persistence. This study provides significant insights for policymakers and investors in managing risk and enhancing market resilience during economic and geopolitical uncertainty.

Keywords: asymmetric; financial market resilience; COVID-19; Russia and Ukraine war; GCC stock market; E-GARCH; volatility (search for similar items in EconPapers)
JEL-codes: C E F2 F3 G (search for similar items in EconPapers)
Date: 2025
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