Effects from the government's closing order due to COVID-19 to Vietnam's stock market

Abstract

This study examines the effects of the COVID-19 pandemic outbreak and its following lockdown on daily stock market in Vietnam, a rapidly growing stock market that has revived successfully after the government shutdown order. This study uses the VECM time series data regression model to evaluate the impact of the daily increase in the number of confirmed COVID-19 cases and the shutdown order on the stock market in Vietnam from January 30 to June 30, 2020. Research results confirm the adverse impact of the daily increase in COVID-19 cases and closure orders on the business of the stock market in Vietnam. The study also shows that the Vietnam stock market before and during the nationwide shutdown played out in different ways. The prolonged restrictions on economic and business activities have caused major economic disturbances, significantly affecting the Vietnam stock market. The closing order affects the production and business situation of enterprises, stock value and investors' decisions, thereby affecting transactions on the stock market. Several policy implications for investors, governments and relevant regulator are also suggested.