Preprint Article Version 1 Preserved in Portico This version is not peer-reviewed

On the Effects of COVID-19 outbreak on the Nigerian Stock Exchange performance: Evidence from GARCH Models

Version 1 : Received: 22 April 2020 / Approved: 24 April 2020 / Online: 24 April 2020 (14:00:19 CEST)

How to cite: Adenomon, M.O.; Maijamaa, B.; john, D.O. On the Effects of COVID-19 outbreak on the Nigerian Stock Exchange performance: Evidence from GARCH Models . Preprints 2020, 2020040444 (doi: 10.20944/preprints202004.0444.v1). Adenomon, M.O.; Maijamaa, B.; john, D.O. On the Effects of COVID-19 outbreak on the Nigerian Stock Exchange performance: Evidence from GARCH Models . Preprints 2020, 2020040444 (doi: 10.20944/preprints202004.0444.v1).

Abstract

COVID-19 was first identified in Wuhan, China in December 2019 and has caused huge death and has spread to almost all the parts of the world. There are speculation that most of the world economy and financial markets would be affected due to lockdown and social distancing. The first case of COVID-19 was first identified in Nigeria on 27th February 2020 and this study examines the effect of COVID-19 outbreak on the performance of the Nigeria stock exchange using historical data covering 2nd March 2015 to 16th April, 2020 sourced from a secondary source. This study considered the COVID-19 period from 2nd January 2020 to 16th April 2020, the results revealed a loss in stock returns and high volatility in stock returns under the COVID-19 period in Nigeria as against the normal period under study. In addition, Quadratic GARCH (QGARCH) and Exponential GARCH (EGARCH) models with dummy variable were applied to the stock returns shows that the COVID-19 has had negative effect on the stock returns in Nigeria. The study recommended that political and economic policy such as stable political environment, incentive to indigenous companies, diversification of the economy, flexible exchange rate regime be implemented so as to improve the financial market and to attract more and new investors to the Nigerian Stock Exchange.

Subject Areas

NSE; COVID-19; QGARCH; EGARCH; Returns

Comments (1)

Comment 1
Received: 12 May 2020
Commenter: COVID-19 Stock Market Crisis: What does it tell us
The commenter has declared there is no conflict of interests.
Comment: This pandemic has affect people and its markets. It affects the normal way of how the world go. Thank you for sharing this and COVID-19 Stock Market Crisis: What does it tell us.
+ Respond to this comment

We encourage comments and feedback from a broad range of readers. See criteria for comments and our diversity statement.

Leave a public comment
Send a private comment to the author(s)
Views 0
Downloads 0
Comments 1
Metrics 0


×
Alerts
Notify me about updates to this article or when a peer-reviewed version is published.
We use cookies on our website to ensure you get the best experience.
Read more about our cookies here.