COVID-19 outbreak and performance of financial markets: evidence from the stock market, the foreign exchange market and cryptocurrencies market in Nigeria

Ibrahim Mohammed

International Journal of Business and Emerging Markets, 2023, vol. 15, issue 1, 1-33

Abstract: The study investigated performance of the stock market, foreign exchange market and the cryptocurrencies market as a result of COVID-19 outbreak. Event studies methodology was employed to determine the abnormal return (AR) and corresponding cumulative abnormal return (CAR) following the first confirmed case of the pandemic and the first recorded case of fatality, after controlling for the concurrent effect of crude price fluctuations. Consistent with previous studies, the paper documented evidence of negative reaction of -0.34% and -1.01% for the Nigerian stock market and the cryptocurrency market respectively at the announcement of first case of the pandemic's outbreak. The study also documented negative and statistically significant effects of -1.71% and -0.78% for Nigerian stock market and the cryptocurrency market respectively when the first case of death was announced. Adverse effect of the pandemic was found to be stronger when the first case of death was announced compared to first reported case of the outbreak. However, negative but insignificant effect was recorded for the foreign exchange market. The paper concluded that negative reaction for the stock market is consistent with market panic and policy uncertainty during the pandemic. Furthermore, adverse effect of the pandemic on the cryptocurrency market was due to increased co-movement of the market with regulated financial markets such as the stock market as well as correlation of returns between the markets.

Keywords: event study methodology; emerging market; financial market efficiency; pandemics; Nigeria. (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.inderscience.com/link.php?id=128157 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:ijbema:v:15:y:2023:i:1:p:1-33

Access Statistics for this article

More articles in International Journal of Business and Emerging Markets from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().