The effect of a new wave of COVID-19 on the stock market performance: Evidence from the twenty JSE listed companies in South Africa

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The lockdown shocks resulting from the global pandemic of COVID-19 in March 2020 brought untold economic imbalance to the financial sector in South Africa. The government’s proactive alternative measure of control to the new wave of COVID-19 must be investigated to offer policy suggestions for future economic and financial planning. Consequently, this study investigated the impact of the new wave of COVID-19 on the financial market with a special interest in the twenty JSE listed companies in South Africa. To enhance the quality in the frequency of study, daily panel data from November 2020 to January 2021 were sourced from S&P Capital IQ and Google online. The impact of COVID-19 was investigated alongside other variables that can influence the return of the stock markets on twenty JSE listed companies. The variables under investigation are daily exchange rate (dollar terms), dividend-adjusted share pricing, daily COVID-19 infection rate. Both robust descriptive and fixed effects time-variant analyses were adopted as the estimating techniques. The study provided empirical evidence that there is a direct but slow link between the daily incidence of infectious COVID-19 and returns on the stock market as key variables. This positive relationship indicates that both COVID-19 and financial activities could co-habit together to enhance greater return on the stock in South Africa. Hence, lockdown may not be most appropriate to the national economy of South Africa.

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    • Figure 1. De-Chem Pharmacies Limited
    • Figure 2. Nam Divi Share
    • Figure 3. AngloGold Ashanty Limited
    • Figure 4. MTN Group Limited
    • Figure 5. De Exxaro Resources Limited
    • Figure 6. Enx Group Limited
    • Figure 7. Impala Platinum Limited
    • Figure 8. Momentum Metropolitan Holding Limited
    • Figure 9. Mr. Price limited
    • Figure 10. Nampak Limited
    • Figure 11. Investec Bank Limited
    • Figure 12. Sasol Limited
    • Figure 13. Santam Limited
    • Figure 14. Sappi Limited
    • Figure 15. Nedbank Group Limited
    • Figure 16. Absa Group Limited
    • Figure 17. Acson Limited
    • Figure 18. Adapt IT Holdings Limited
    • Figure 19. Investec Bank Limited
    • Figure 20. Bid Corporation Limited
    • Figure 21. COVID-19 data
    • Figure 22. Stocks returns
    • Figure 23. Exchange rate
    • Figure 24. Dividend adjusted share pricing
    • Table 1. Panel correlation matrix for all the twenty firms under investigation
    • Table 2. Joint test for skewness/kurtosis tests for normality
    • Table 3. Fixed effects result on the series: DAS pricing, COVID-19, exchange rate, and return on the stock
    • Conceptualization
      Gbenga Wilfred Akinola, Keji Sunday Anderu
    • Data curation
      Gbenga Wilfred Akinola
    • Formal Analysis
      Gbenga Wilfred Akinola
    • Investigation
      Gbenga Wilfred Akinola, Josue Mbonigaba
    • Methodology
      Gbenga Wilfred Akinola, Josue Mbonigaba
    • Writing – original draft
      Gbenga Wilfred Akinola
    • Writing – review & editing
      Gbenga Wilfred Akinola
    • Software
      Keji Sunday Anderu
    • Validation
      Keji Sunday Anderu, Josue Mbonigaba
    • Visualization
      Keji Sunday Anderu
    • Project administration
      Josue Mbonigaba
    • Supervision
      Josue Mbonigaba