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Author(s): Gbenga Festus Babarinde.

Volume/Issue: Volume 3 , Issue 3 (2020)

Abstract:

Stock market is said to be information-driven. Thus, information on health pandemic such as the novel coronavirus disease (COVID – 19) is perceived to impact stock market indicators such as the stock price index. In view of this, this study explored the effects of positive, discharged and fatal cases of COVID – 19 on stock prices in the Nigerian Stock Exchange (NSE). This study adopts event study research design and employed Granger causality and Vector Autoregression (VAR) techniques in analyzing the weekly time series data sourced from the websites of NSE and the Nigeria Centre for Disease Control. This research covered a period of 30 weeks, beginning from Monday, March 2, 2020 and ending Friday September 25, 2020. Empirical findings suggest no evidence of causality between coronavirus and stock prices in Nigeria. Furthermore, the study found that COVID-19 discharged and fatal cases have positive effects on stock prices in Nigeria while the effect of the confirmed cases is negative. None of the measures of coronavirus was statistically significant in explaining stock prices in Nigeria. It can therefore be concluded that coronavirus does not constitute a significant determinant of stock price movement in Nigeria in the study period. It is suggested that future studies should interact coronavirus measures with other variables and examine their effects on stock market performance.

Keywords:

Coronavirus, COVID-19, Discharged Cases; Confirmed Cases, Fatal cases, All-share index, Stock Prices, Stock market.

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