Coronavirus Information Spread and Banks’ Stock Returns in Nigeria: An Event Study Approach
1Ikwuagwu, Henry Chinedu, 2Efanga, Udeme Okon, 3Kingsley Nwagu 4Ihemeje J.C.
1Department of Banking and Finance, Michael Okpara University of Agriculture, Nigeria2Department of Banking and Finance, University of Calabar, Nigeria
3Department of Management, Texila American University
4College of Management Sciences, Michael Okpara University of Agriculture, Nigeria
https://doi.org/10.47191/jefms/v4-i1-01
ABSTRACT:
This research study empirically assessed the corona virus information spread and banks’ stock returns in Nigeria. The study adopted event study approach which suites the research because of its descriptive nature. The daily data of closing share prices of the selected banks listed in Nigerian Stock Exchange (NSE) was collected from NSE website for a period of 146 days. Using 124 days estimation window, the result shows that the Intercept (C) and Market Returns (MKTR) has a coefficient of -0.00125 and -0.00848 respectively. Analyzing the stock of commercial banks in the Nigerian stock exchange during the first 100 days of COVID-19 contagious infectious disease outbreak in Nigeria, we find that the pandemic disease interacts positively with stock returns which is against the expectation. Specifically, banking firms’ abnormal returns on the corona virus information spread at 100th day are positive but insignificant. We therefore conclude that COVID-19 information into the Nigerian banking sector triggers positive investment in the sector with desirable abnormal returns. We therefore call the relevant authorities to adequately consider policy responses implemented in the sector, and to further analyze information about the COVID-19.
KEYWORDS:
Nigerian Stock Exchange (NSE), COVID-19, Market Returns (MKTR) and Abnormal Returns
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