RELATIONSHIP BETWEEN COVID-19 PANDEMIC AND THE PERFORMANCE OF THE NIGERIAN STOCK MARKET

CHIGOSIMUZO AGUNOBI, E. C OKOLI, B.I. HARUNA, YUSUF ABELE MADI

Abstract


This study aimed to examine the relationship between COVID-19 pandemic and the All-Share Index (ASI) trend in the Nigerian Stock Market. The study analyzed weekly data from January 1st through December 31st, 2021, utilizing the ASI as the dependent variable and the total number of confirmed COVID-19 cases (Covid) in Nigeria as the independent variable. The Engle-Granger two-step and ARDL f-bounds cointegration tests were conducted, and the study adopted the Vector Error Correction Model (VECM) to investigate the short-term dynamics. The study found a negative long-term relationship between ASI and Covid, indicating that a shock in COVID-19 affects the stock market negatively in the short run. The study concluded that the total number of COVID-19 cases has no significant relationship with All Share Index. Although the study's outcome was negative, it recommended the Nigerian government continue to observe the COVID-19 pandemic and take appropriate measures to mitigate its spread. While COVID-19 may not directly affect the stock market, it could impact other sectors of the economy that could eventually affect the stock market in the long run.

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