Characterizing the Impact of COVID-19 on the Global Stock Indices through Comparative Analysis

This paper shows the impact of COVID-19 on the global stock indices through the use of comparative analysis. Stock indices are presented by regions (Africa, Americas, Europe, Asia, and Oceania) and national stock indices are compared based on historical data. A 2:4 month ratio is used as a “window” for observing the changes in the movement of the price of indices from November – December 2019 and January – May 2020 respectively. COVID-19 infection count, recovery rate, and death rate are identified in each country from the first case recorded up to May 20, 2020. Based on analysis it appeared that there is no sufficient evidence to conclude that the changes in the value of indices is affected by the COVID-19 infection count (p-value = 0.9129). In Africa, only INDZI (Zimbabwe) showed a positive change of price in percentage points (1.39%) for January to May 2020 with 51 confirmed COVID-19 cases. In Asia, only SZSE (China) showed a positive mean change of price in percentage points (0.07%) in the same period with 82,971 confirmed cases. Similarly, in Europe, only OMXC20 (Denmark) showed the same with (0.09%) with 11,182 confirmed cases. In the Americas, NYSE Arca (US), Nasdaq100 (US), and MERVAL (Argentina) showed a positive mean change in price in percentage points (0.31%, 0.20%, and 0.89%) with 1,620,902 and 9,918 confirmed cases respectively. On the other hand, in Oceania, both NZX 50 (New Zealand) and S&P/ASX20 (Australia) showed a negative mean change in prices (-0.03 & -0.15) respectively. In general Asian and European indices suffered a 0.28% decrease in the mean change in daily prices as compared during November to December 2019. African indices on average stood to be the least affected with 0.11% mean change in daily prices as compared to -0.02% from November to December 2019.


Introduction
National stock indices represent the overall health of a country's economy. Several studies suggest that "Black Swan" events which include terrorism, extreme natural events, wars, and pandemics affect the stock prices. Although there is still an on-going debate whether COVID-19 pandemic can already be considered a "Black Swan", unprecedented damages in the global economy has already been observed. Using available data, this paper examines the impact of COVID-19 on global stock indices. Stock indices are divided into 5 regions (Africa, Asia, Europe, Americas, and Oceania). Results showed that in general, all regions except Africa experienced negative growth. However, in the country level, only Zimbabwe in Africa sustained a positive growth for the period of January to May 20, 2020. In the Americas, only the US and Argentina showed positive growth. In Europe and Asia only Denmark and China sustained positive growth. The majority of the indices worldwide showed slowing down and most are already experiencing a signi cant decrease in value. Furthermore, the results of the analysis showed that there is no su cient evidence to conclude that national stock indices are signi cantly affected by the number of COVID-19 cases. This result could be due to all countries implementing measures such as lockdowns, closure of non-essential businesses, and reducing economic activities to control or prevent the further increase in new infection regardless of having a low or a high infection count.

Materials & Methods
Comparative analysis is used in order to characterize and quantify the impact of COVID-19 to the global stock indices. Daily records of price and percentage change in price from November 21 to December 31, 2019, are used as a baseline or pre COVID-19 periods and January 1 to May 20, 2020, are used as intra-COVID-19 periods. A 2:4 month ratio is preferred as a "window" for observing the changes in daily prices since it allowed reducing disturbances in prices that aren't completely related to the COVID-19 pandemic.
Also, the duration captures the effect of lockdown measures and closure of non-essential businesses as well as COVID-19 mitigation programs that affect the overall health of a country's economy and stock indices. COVID-19 statistics in each country are identi ed and listed in terms of infection count and derived statistics are computed speci cally, recovery rate and death rate. Correlation analysis is performed in order to identify signi cant interrelation between the mean changes of price of an index with the count of COVID-19 infection. Finally, data visualizations are used using daily changes of prices for each index in order to show the behavior of the indices from November 21 to May 20, 2020.

Results & Discussion
In Africa, Egypt sustained the most loss with EGX 30 suffering from -0.06% to -0.30% on average from November 21, 2019, to May 20, 2020. Egypt is one of the worst-hit countries in Africa with 14,299 COVID-19 con rmed cases as of May 20, 2020. Other African indices followed the same pattern (See Figure 1 The Securities Exchange Commission has extended the audited nancial statement submission deadline from March 31, 2020 to May 31, 2020. Similarly, the quarterly return submission deadline has also been extended from April 14, 2020 to May 15, 2020.
The ling deadlines of listed companies has been extended to April 30, 2020. All Trading in securities of all issuers shall be done carefully during the lockdown period. Consequently there will be no need for issuers to issue individual cautionary statements. Every issuer is expected to provide an update on the special trading by May 15, 2020 including a statement on the solvency of the issuer in light of the pandemic and the lockdown order on its business.
The regulations on exchange have been amended and will take effect starting from March 29, 2020. The amendments allow any person to pay for services and goods that are chargeable in Zimbabwe dollars or in a foreign currency using free funds at the ruling rate on the date of payment. The payment through a foreign currency account or in cash can be done online through any electronic payment platform.
The economic stimulus proved to be effective with INDZI being the only index in Africa to sustain a positive growth from January to May 20, 2020. In the Americas, NYSE Arca, Nasdaq-100 (US), and MERVAL (Argentina) are able to sustain a positive mean change in price (0.30%, 0.14%, and 0.03%) respectively from January to May 2020. Although MERVAL suffered a decrease from 0.89% (November to December 2019) to 0.03% (January to May 2020) the economic measures employed by Argentina prove to be effective. Some of the economic stimulus employed by Argentina are the i: 1. Based on AFIP 4693/2000 resolution, employers registered by the AFIP and who will register will enjoy a postponement of employer's contributions from March to mid of June. The Committee on Emergency Assistance Program for Jobs and Production (CEAP) shall also identify possible additional measures for both the workers and employees.

The Emergency Assistance Program for Jobs and Production has been enacted with the ff:
Postponement of employer's contributions to the Argentinian Social Security Up to 95% reduction of the payment of employer contributions to the Argentinian Social Security The Government of Argentina shall cover part of the workers' wages subject to requirements.
Also, vulnerable people over 60 years of age shall be given a labor 3. The Central Bank shall provide incentives to banks who will grant credits with preferential rates to small and medium companies for the payment of 4. Expansion of Ahora 12 program which provides incentives and nancing programs for the consumption of national products including products from online    In Europe only OMXC20 (Denmark) showed a positive mean change in price of 0.09% from January to May 2020. However, it suffered a decrease of 0.10% from 0.19% mean change in price from November to December 2019. The COVID-19 infection count of Denmark is 11,182 on May 20, 2020 with 86% recovery and a 5.02% death rate. The rst COVID-19 case of the country occurred on February 27, 2020 when a journalist returned from abroadiv. Following the increase in infection the Danish government ordered the closure of educational institutions and banned public gatherings. On March 14, the country closed its borders and allowed only Danish citizens and people with important agendas to enter the country. Stimulus packages to cover employees and employers were enacted to cover the losses brought about by reduced economic activity due to the pandemic. ATG (Greece) suffered the most loss in the European region sliding 0.25% from 0.12% from November to December 2019 to -0.37% from January to May 2020.  ***New Zealand is excluded due to unavailability of data. Table 6 shows the comparison of relevant statistics across the regions. Europe has the highest COVID-19 mean death rate of 7.08% followed by the Americas which has 6%. In terms of COVID-19 mean recovery rate, Oceana registered the highest at 91% while Asia and Europe at 61.50% and 60.12%

Comparison across Regions
respectively. The impact of COVID-19 to stock indices is mostly felt in Asia and Europe with both having a -0.17% mean change in daily prices from January to May 2020. Asian and European indices also suffered a 0.28% decrease in the mean change in daily prices as compared during November to December 2019. African indices on average stood to be the least affected with 0.11% mean change in daily prices as compared to -0.02% from November to December 2019.

Conclusion
This paper showed the impact of COVID-19 on the global stock indices. Although it failed to prove the existence of a signi cant relationship between the changes in the prices of indices and COVID-19 infection count it's still able to show how indices across Africa, Asia, Europe, Americas, and Oceania reacted to the pandemic. Argentina's MERVAL and Denmark's OMXC20 are able to retain positive mean change in daily prices particularly due to the measures the governments of these countries employed.
However, it could be too early to tell if these measures can endure the continuously growing cases of COVID-19 infections and the reduced economic activity brought about by lockdowns and closure of nonessential businesses. The developing con ict between the United States and China could also play a signi cant role in the future values of the indices across the region. Countries are now weighing the consequences of salvaging the economy and protecting the welfare of its citizens.  Africa