Covid 19 - More Than Just A Health Issue: Impacts Of The Pandemic On The Composite Stock Price Index In Ho Chi Minh City
Abstract
Purpose: This study investigates the relationship between the changes in announced
infection rates, fatalities rates and recovered rates of the SARS Cov-2 pandemic on the
VNIndex in Ho Chi Minh city to help businesses and investors to adjust their investing
orientation and financing plans and improve their investing effectiveness when it comes to
special events like global pandemics or international crises like Covid 19.
The methodology of the research: Taking place in Ho Chi Minh city, this descriptive
research uses a quantitative method based on secondary data of daily data with an observation
extending from January 2021 to December 2021. This study has 5 main variables: COVID-19
confirmed infected rates, death rates and recovered rates, the stock return of VNIndex, and the
other nine determinants of VNIndex. After being collected, the other nine determinants of
VNIndex will be processed through PCA to derive two factors that best represent them. After
that, three pandemic rates are processed into daily changes and then standardized to fit with the
data of daily stock returns and reprocessed along with two factors and the remaining variables
using the vector autoregressive (VAR) model with the panel data regression method.
Result: Based on previous studies and on some updated data in this study, this paper is
expected to witness a similar conclusion: stock markets witness a more positive intense
response to the growth in new infection rates and fatalities rates. However, when it comes to
the growth in the recovered rates, it is witnessed a statistically significant negative reaction.