Abstract
The aftermath of the COVID-19 pandemic is not limited to human lives and health sectors. It has also changed social and economic aspects of the world. This study investigated the Islamic stock market’s reaction and changes in volatility before and during this pandemic. The market model of event study methodology was employed to analyze Islamic stock market reactions in nine different markets around the globe. To examine changes in volatility and persistence of risk, the generalized autoregressive conditional heteroscedasticity (GARCH) method was used. Nine Islamic stock indices were selected for this study from the Thomson Reuters data stream. The results suggest that, in the short run, the Islamic Australian stock index and Islamic GCC stock index remained stable for the first 15 days following news of the pandemic. The Islamic stock indexes of Qatar, UAE, ASEAN, MENA, MENASA, and Bahrain were significantly affected by the outbreak in the short-term. On the other hand, the volatility of Islamic stock indices was substantially amplified after the global health crisis was declared by the WHO. Moreover, volatility shocks tended to persist for a longer period after COVID-19.
Highlights
IntroductionSince the beginning of 2020, the world has been alarmed by a new virus namedCOVID-19
Since the beginning of 2020, the world has been alarmed by a new virus namedCOVID-19
Using the Thomson Reuters’ Islamic stock indexes of Australia, Qatar, Bahrain, UAE, MENA, MENASA, BRIC, and GCC, this study captured the responses of all selected indices in short- and long-term event windows
Summary
Since the beginning of 2020, the world has been alarmed by a new virus namedCOVID-19. According to the Wuhan municipal health committee (WMHC), on 30th December 2019, four patients presenting symptoms similar to pneumonia were admitted to a municipal hospital in Wuhan, and the diagnosis could not be made in time (ProMED 2019; Sohrabi et al 2020). The cases of this unknown disease increased significantly by midJanuary 2020 despite a huge influx of multidisciplinary task force workers, as recommended by WMHC. Soon after the breakout of COVID-19, several economic and social changes occurred, with immediate effects in China and other parts of the world. The recent global health crisis triggered by COVID-19 is expected to impart severe economic, social, and financial effects on a global scale (Goodell 2020)
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
