Motivated by the rapid spread of the COVID-19 outbreak in the world, this study aims to explore the stock markets’ response toward it in the Middle East and North Africa (MENA) countries.
Ordinary least squares (OLS) regressions were used to analyze the association between the COVID-19 outbreak and stock market returns. The author made use of a panel data set, including 4,195 observations from 13 countries in MENA for the period January 29, 2020, to April 30, 2021. The dependent variable was stock market returns. The explanatory variable, i.e. COVID-19, was proxied by daily growing confirmed infected cases and daily growing confirmed death cases caused by the outbreak.
The author finds that stock markets have responded negatively to the growth in COVID-19 deaths. Meanwhile, stock markets show no reaction to the daily growth of confirmed infected COVID-19 cases.
This study presents worthy information to regulators and policymakers in MENA countries, whose responsibility is to govern regulations at the macro and micro levels based on a comprehensive route that leaves no one behind. This study also offers significant insights to policymakers, managers, investors and society by showing how the stock markets quickly react to outbreaks.
This study is, to the best of the author’s knowledge, among those exploring the impact of the COVID-19 outbreak on stock market returns in the MENA countries.
