The impact of COVID-19 on stock market returns: Empirical evidence from Nigeria


  • Mela Yila Dogo Nile University of Nigeria, Abuja, Nigeria
  • Osman Nuri Aras Tishk International University, Iraq



Stock returns, COVID-19, ASI, NSE30, Nigeria


The study investigates the causal relationship between COVID-19 and changes in the prices and volume of stocks in the Nigerian stock market, to identify whether there is a short and or long-run relationship between changes in the Nigerian Stock Exchange All Share Index 30 (NSE ASI 30) and NSE 30 traceable to the outbreak and continued presence of the coronavirus-19 diseases (COVID-19) during the period 31 December 2019 to June 30, 2020.

The paper seeks to estimate the effect of the COVID-19 shocks on the volatilities of returns in the NSE30 and ASI 30 stocks. After a property check on the times series data, a correlation matrix was drawn to understand the relationship between stock returns in NSE30 and ASI30 with total cases, test units, new cases, female and male smokers, and COVID-9 deaths. The ADF results helped us in selecting what the use in the representative model.

We then applied the Lagrange Multiplier (LM) test on the residuals of both the mean and the variance equations of the NSE30 and the Generalized Autoregressive Conditional Heteroscedastic (GARCH) to estimate the short and long-run return spillovers and conditional correlations between the shock from COVID-19 and stock market returns.

Generally, the results indicated a weak impact of COVID-19 on the returns and volume of both the NSE30 and NSE ASI 30 stocks. This is so because of some data issues and issues relating to empirics. More data will be sought, and a proper review of the paper undertaken, to ascertain its usefulness for policy.

The study concludes that to spur economic growth in COVID-19, Nigeria’s economic managers, particularly, the monetary, fiscal, and capital market regulators must learn to work as a team, to ensure complementary in their policies and thus, propel the economy out of a likely recession.


Abu, N., Gamal, A. A. M., Sakanko, M. A., Mateen, A., Joseph, D., & Amaechi, B. O. O. (2021). How have COVID-19 confirmed cases and deaths affected stock markets? Evidence from Nigeria. Contemporary Economics, 15(1), 76-100.

Adekoya, E. (2020), Coronavirus and the lessons we can learn from the 1918-1920 Great Influenza Pandemic, University of Lagos, Nigeria. Retrieved from

Adenomon, M. O., & Maijamaa, B. (2020). On the Effects of COVID-19 outbreak on the Nigerian Stock Exchange performance: Evidence from GARCH Models. Preprints 2020, 2020040444. DOI:10.20944/preprints202004.0444.v1

Aktar, M. A., Alam, M. M., & Al-Amin, A. Q. (2020). Global economic crisis, energy use, CO2 emissions, and policy roadmap amid COVID-19. Sustainable Production and Consumption, 26, 770-781.

Alade, M. E., Adeusi, S. A., & Alade, F. O. (2020). COVID-19 pandemic and Nigerian stock market capitalization. Ilorin Journal of Economic Policy, 7(3), 12-23.

Alam, A. (2020). COVID-19 economic impact. Point in Focus, Special Edition. Retrieved from

Al-Awadhi, A. M., Alsaifi, K., Al-Awadhi, A., & Alhammadi, S. (2020). Death and contagious infectious diseases: Impact of the COVID-19 virus on stock market returns. Journal of Behavioral and Experimental Finance, 27, 100326.

Baker, S. R., Bloom, N., Davis, S. J., Kost, K., Sammon, M., & Viratyosin, T. (2020). The unprecedented stock market reaction to COVID-19. The Review of Asset Pricing Studies, 10(4), 742-758.

Barro, R. J., Ursúa, J. F., & Weng, J. (2020). The coronavirus and the great influenza pandemic: Lessons from the “spanish flu” for the coronavirus’s potential effects on mortality and economic activity. Working Paper, No. w26866. National Bureau of Economic Research. DOI: 10.3386/w26866

Eren, F. and Hizarci, A. E. (2020). The impact of COVID-19 coronavirus on stock markets: Evidence from selected countries. Muhasebe Finans ?ncelemeleri Dergisi, 3(1), 78- 84, DOI: 10.32951/mufider.706159

Farzanegan, M. R., Feizi, M., & Gholipour, H. F. (2021). Globalization and the outbreak of COVID-19: An empirical analysis. Journal of Risk and Financial Management, 14(3), 105.

Fernandez-Perez, A., Gilbert, A., Indriawan, I., & Nguyen, N. H. (2021). COVID-19 pandemic and stock market response: A culture effect. Journal of Behavioral and Experimental Finance, 29, 100454.

Gormsen, N. J., & Koijen, R. S. (2020). Coronavirus: Impact on stock prices and growth expectations. The Review of Asset Pricing Studies, 10(4), 574-597.

Jackson, J. K., Weiss, M. A., Schwarzenberg, A. B., & Nelson, R. M. (2020). Global economic effects of COVID-19. World Health Organization, COVID-19 Global Literature on Coronavirus Disease.

Jelilov, G., Iorember, P. T., Usman, O., & Yua, P. M. (2020). Testing the nexus between stock market returns and inflation in Nigeria: Does the effect of COVID?19 pandemic matter?, Journal of Public Affairs, 20(4), e2289.

Lamoureux, C. G., & Lastrapes, W. D. (1990). Persistence in variance, structural change, and the GARCH model. Journal of Business and Economic Statistics, 8(2), 225-234.

McKibbin, W., & Fernando, R. (2021). The global macroeconomic impacts of COVID-19: Seven scenarios. Asian Economic Papers, 20(2), 1-30.

Mas-Coma, S., Jones, M. K., & Marty, A. M. (2020). COVID-19 and globalization. One Health, 9.

Maital, S., & Barzani, E. (2020). The global economic impact of COVID-19: A summary of research. Samuel Neaman Institute for National Policy Research, 2020, 1-12.

Mazur, M., Dang, M., & Vega, M. (2021). COVID-19 and the march 2020 stock market crash. Evidence from S&P1500. Finance Research Letters, 38, 101690.

Normuradova, A. (2020). The Impact of Coronavirus (COVID-19) on Macroeconomic Stability. Westminster International University, Tashkent, Uzbekistan. Retrieved from

OECD (2020). Coronavirus: The world economy at risk. OECD Interim Economic Assessment.

Onali, E. (2020). COVID-19 and stock market volatility. Available at SSRN 3571453. or

Pierce, D. A. (1972). Least squares estimation in dynamic-disturbance time series models. Biometrika, 59(1), 73-78.

Qadri, B. (2020). Globalization and COVID-19 nexus: Lessons from the rational expectations model, The Great Kashmir Today, Issue of April 8, 2020.

Ruiz Estrada, M. A., Koutronas, E., & Lee, M. (2020). Stagpression: The economic and financial impact of COVID-19 Pandemic. Contemporary Economics, 15(1), 19-33. DOI: 10.2139/ssrn.3578436

Ruiz Estrada, M. A., & Khan, A. (2020). Globalization and pandemics: The case of COVID-19. (March 25 2020). Available at SSRN 3560681.

Sansa, N. A. (2020). The impact of the COVID-19 on the financial markets: Evidence from China and USA. Electronic Research Journal of Social Sciences and Humanities, 2(2). Available at SSRN: or

Sforza, A., & Steininger, M. (2020). Globalization in the time of COVID-19. CESifo Working Paper No.8184, Available at SSRN:

Shrestha et al. (2020). The impact of COVID-19 on globalization. One Health, 11, 100180.

Song, L., & Zhou, Y. (2020). The COVID?19 Pandemic and its impact on the global economy: What does it take to turn crisis into opportunity?. China & World Economy, 28(4), 1-25.

UNCTAD (2020a). Impact of the Coronavirus outbreak on global FDI. Investment Trends Monitor, Special Issue.

UNCTAD (2020b). Technical note global trade impact of the Coronavirus (COVID-19) epidemic. Trade and Development Report Update. United Nations Conference on Trade and Development.

Yilmazkuday, H. (2021). COVID-19 effects on the S&P 500 index. Applied Economics Letters, 1-7.

World Health Organization (WHO). Various Publications.




How to Cite

Dogo, M. Y. ., & Aras, O. N. (2022). The impact of COVID-19 on stock market returns: Empirical evidence from Nigeria. Eurasian Journal of Higher Education, 3(6), 38–57.