Volume 18, No. 6, 2021

The Impact Of Covid 19 On Stock Price Returns: Evidence From Pakistan

Rashid Khan , Adnan Ahmad , Yasir Zeeshan , Naveed Hussain Shah , Fawad Ali


The effects of the Covid-19 pandemic on global stock markets have been noticed and reported all over the globe. Developed as well as developing economies have recorded almost the same effect. Through due to the limited resources, low capital structure and less developed capital markets in the developing as well as the emerging economies have reported more effects of Covid-19 in their economies. This study investigates one such impact of an extremely contagious pandemic in one of the developing country Pakistan. Using an event study technique based on the prior literature that such events can best be evaluated through event study technique; we take the sample period form February 2019 to March 2020 for a 10 days pre and post event window (making it a 21-day event) for 63 firms in Pakistan. We report that Covid-19 does not show adverse effect on the share prices of the sample companies. We show that average abnormal return (AAR) values are mostly negatives prior to the Covid 19 while portrays a positive trend after the Covid-19 announcement. The main ground of no effect of the pandemic could be attributed to timely and proactive response of the government of non-closure of businesses in the country. The study has implications for future for both government as well as firms to devise strategies in advance for coping up with such pandemics in the future.

Pages: 3822-3830

Keywords: Covid 19, Stock Market Returns, Abnormal Returns, Event Study

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