SCHOOL OF BUSINESS AND MANAGEMENT

CHRIST (Deemed to be University)

BANGALORE
2022

RESEARCH MANAGEMENT CIA 1.2

Hypothesis Formulation & Questionnaire Design (Impact

of COVID-19 on the Global Equity Markets).

Submitted to: Dr. Tijo Thomas

On February 3rd, 2022.

Submitted by:

Arya Shirke (2020568)

Siddhant Agrawal (2020535)

Ananya Gaur (2020543)

Chandrakirti TA (2020510)

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 TABLE OF CONTENTS

SL. PAGE
TOPIC
NO NUMBER

1. Background 2

Methodology:

-Scope of research

- Parameters and variables

2. - Research questions 4-11

- Research objectives

- Hypothesis statement

- Questionnaire

3. References 12

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Problem Statement

In late 2019 a new virus known as COVID 19 started to spread causing “severe pneumonia”.

One of the commercial effects was an unexpected disruption in the flow of goods and services,

commodity prices and financial conditions creating an economic disaster because of its impact

on the production and supply chain in the world. Although the lowest point of the COVID 19

financial crash occurred during March 2020 for all major stock markets, the subsequent

recovery has been uneven. While some markets rebounded to reach record highs by the end of

2020, others remain below their pre-corona virus peak. The equity market is a device for

transferring money from the impatient to the patient. Financial markets with a high

concentration of shares for companies benefitting from the pandemic recovered more quickly

than more diversified, traditional markets. While there is no way to tell exactly what the

economic damage from the global COVID 19 pandemic has been, there is widespread

agreement that it has had a severe negative impact on global equity markets. In Equity Markets

across the globe, a few segments of stocks saw growth whereas most of the other sectors were

deeply hit and saw a downward trend in their prices.

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Need for Study

The several effects that COVID-19 has brought upon the global equity markets has left a mark

on the economies of several nations. It has affected the individual, corporate as well as national

wealth. Due to the severe impacts of the virus on markets, it has become necessary to study

these impacts and take corrective actions for the same. In order to take measures to prevent

further hits to the markets, it is necessary to study these impacts and observe patterns and trends

in the same. This study would be helpful for portfolio managers, investors and stockbrokers in

the current scenario and for market enthusiasts in the coming future. In order for effective

portfolio diversification and risk management, it is also necessary to determine how the shocks

of the pandemic are transferred from one market to another. This study helps in discovering

the investment pattern of investors in the economy as well as the sector-specific response of

the stocks to these investment patterns.

Thus, this study is needed to acquire knowledge of how a pandemic can affect the markets and

the pattern followed by stocks of certain industries during it. This pattern can help in making

predictions and thus help investors make investment decisions.

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 METHODOLOGY

Scope of the Research Study:

The COVID-19 pandemic and the resulting lockdown has hindered life across the globe. None

could escape the effects of the pandemic, country or organization. This study aims to find the

impact of the pandemic on equity instruments across the globe. The research hence needs to

be conducted across and including various demographics by taking a look at financial markets

in Africa, Asia, Europe, North and South America and Australia. The study includes a total of

75 countries (taking into account developed and developing countries). A total of 750 firms are

taken into observation from the textile, construction, pharmaceutical, healthcare, energy,

utility, consumer goods, clothing, infrastructure, industrial, financial, IT and real estate sectors.

It does not include companies that were incorporated during the COVID-19 pandemic,

companies with less than 1000 employees as well as companies that have not broken even. The

duration of the study is 6 months starting from the 31st December 2019 to 31st May 2020,

providing a sample of 104 trading days. The study will also look into the number of active

COVID-19 cases as well the number of deaths for each country as reported by the Ministry of

Health of the respective country for everyday of the research period to check for any relation

between them on the performance of stocks, investing patterns and sector-specific impact in

different parts of the globe.

The study will also assess the government policies and interventions to combat the pandemic

and their efforts in influencing the investment decisions. For this purpose, countries such as

Vietnam, whose government reacted well to the pandemic and UK, whose government reacted

poorly will also be compared to check the performance of stocks to determine any relationship

between government policy and stock performance. Though there are papers that dive into this

topic, there is none that looks at all the mentioned demographics in detail in the same study as

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this one. Hence, it will be a first of its kind. Thus, keeping the survey an open-ended one in

terms of the scope will help us garner an effective response and better-established results. Since

a lot of pre-existing data and research also is readily available for the same topic, those papers

will be qualitatively evaluated before reaching conclusions too. This study will effectively

increase the knowledge of the overall impact of the pandemic on equity markets across the

globe. Measures have been in taken to limit the bias in choosing the population. This will

provide us with a larger input base to derive conclusions from.

Identification of Variables and Parameters.

A variable, in our research project, while mentioned is referred to the phenomenon that we are

trying to measure using various techniques. We have identified both independent and

dependent variables. They are as follows-

Independent Variables:

 Daily confirmed new COVID-19 cases- The number of COVID-19 cases present will

act as a factor that influences the stock market’s performance. The increase in the

number of COVID-19 cases will affect the production level of companies as well the

income of households.

 Daily confirmed new COVID-19 deaths- The rise in the number of COVID-19 deaths

per day will affect the investing decisions of parties across the globe in a different

manner.

 Government Policy Interventions- These include non-pharmaceutical interventions

targeted to contain the pandemic such as school closure, workplace closure, cancelled

public events, closed public transport, public information campaigns, restrictions on

internal movement and international travel controls as well as pharmaceutical

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 interventions such as vaccination mandate. They act as independent variables as they

affect the performance of companies as well as the income of households.

Dependent Variable:

 Return of stock on a particular day of trading- The performance of stock is the only way

to measure the impact of COVID-19 on the equity markets. This variable is hence

dependent on the factors such as number of cases, number of deaths, market

capitalization, government policy measures which all act as independent or explanatory

variables. It measures the return of stock of a particular company (say x) on any given

trading day during the research period (say y).

 Income of Investors- The income of investors is actively affected by the COVID-19

pandemic and this in turn will affect their investing patterns.

Parameters:

All of the items were rated using a five-point Likert Scale. Under this scale 1 being the most

strongly disagreed with and 5 being the most strongly agreed with.

Scale:

 Strongly Disagree

 Disagree

 Neither agree nor disagree

 Agree

 Strongly agree

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Research Questions

1. Does the COVID-19 pandemic affect individual behaviour in Global Equity Markets?

2. Is there any relation between the number of COVID-19 cases and investment patterns

in Global Equity Markets?

3. Are there any country-specific implications of COVID-19 on Equity Markets?

4. Are there any equity instrument-specific implications of COVID-19 on Equity

Markets?

5. What is the impact of COVID-19 on the performance of equity instruments globally?

6. Are there any sector-specific implications of COVID-19 on Equity Markets?

7. Does government intervention and policies post COVID-19 affect the investment

pattern worldwide?

Research Objectives

1. To find the relation between the number of COVID-19 cases and individual investment

patterns.

2. To determine the performance effect of equity instruments after the COVID-19

pandemic.

3. To determine any sector, country, instrument-specific implications of COVID-19 on

Equity Markets.

4. To understand the significance and impact of COVID-19 on global equity markets.

5. To find any relation between the number of deaths and resultant lockdown due to

COVID-19 on the investment decisions of investors across the globe.

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Hypothesis statements: Arya

H1: A rise in the COVID-19 cases have a negative impact on individual investment patterns.

H2 COVID-19 pandemic has sector, country, instrument-specific negative implications on

:

equity markets.

H3: COVID-19 pandemic negatively affects the performance of equity instruments.

Questionnaire

1. Name: ____________

2. Age: ____________

3. Income: ____________

4. Are you currently employed?

 Yes

 No

5. Country of residence.

6. Are you actively investing in equity markets?

 Yes

 No

7. Has the COVID-19 pandemic affected your equity market behaviour severely?

 Strongly Agree

 Agree

 Neither Agree or Disagree

 Disagree

 Strongly Disagree

8. Do you think that corporate losses are socialized, and profits are privatized?

 Strongly Agree
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  Agree

 Neither Agree or Disagree

 Disagree

 Strongly Disagree

9. Do you think that the relationship between the economy and the equity market has

changed during the pandemic?

 Strongly Agree

 Agree

 Neither Agree or Disagree

 Disagree

 Strongly Disagree

10. As the equity market leads the economy by 6-9 months, do you think COVID can be

tackled in that period and market recovery can be on track?

 Strongly Agree

 Agree

 Neither Agree or Disagree

 Disagree

 Strongly Disagree

11. Do you think the equity market is actually related to how the economy is doing?

 Strongly Agree

 Agree

 Neither Agree or Disagree

 Disagree

 Strongly Disagree

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12. Which was your preferred industry to invest in during the pandemic?

 Textile

 Construction

 Healthcare

 Pharmaceutical

 Other: ____________

13. How did your equity portfolio react to the impact of the pandemic?

 Quick growth

 Slow growth

 No effects

 Slow downward trend

 Quick downward trend

14. Do you believe that equity markets have further impacts on other markets such as the

bond market and real estate market?

 Strongly Agree

 Agree

 Neither Agree or Disagree

 Disagree

 Strongly Disagree

15. Looking at the stock market indices of your own country during the pandemic, did you

think investing in foreign equity markets would have led to better returns?

 Strongly Agree

 Agree

 Neither Agree or Disagree

 Disagree

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  Strongly Disagree

16. Did you consider diversifying your portfolio during the pandemic by investing in

cryptocurrency or NFT’s?

 Yes

 No

17. Did information reported on the internet or any media source regarding the COVID-19

pandemic affect your investing decisions?

 Strongly Agree

 Agree

 Neither Agree or Disagree

 Disagree

 Strongly Disagree

18. Did your investing habits change during the pandemic due to any changes in income or

expenditure?

 Strongly Agree

 Agree

 Neither Agree or Disagree

 Disagree

 Strongly Disagree

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 Reference

 Maretno Agus Harjoto, Fabrizio Rossi (2021) Market reaction to the COVID-19
pandemic: evidence from emerging markets, International Journal of Emerging
Markets, Vol. 1 No. 17 © Emerald Publishing Limited 1746-8809 DOI
10.1108/IJOEM-05-2020-0545
https://www.emerald.com/insight/1746-8809.htm

 Ikhlaas Gurrib (2021) Early COVID-19 policy response on healthcare equity prices,
Studies in Economics and Finance Vol. 38 No. 5, 2021 pp. 987-1006 © Emerald
Publishing Limited 1086-7376 DOI 10.1108/SEF-02-2021-0075
https://www.emerald.com/insight/1086-7376.htm

 Imlak Shaikh, Toan Luu Duc Huynh (2021) Does disease outbreak news impact
equity, commodity and foreign exchange market? Investors’ fear of the
pandemic COVID-19, Journal of Economic Studies © Emerald Publishing Limited
0144-3585 DOI 10.1108/JES-10-2020-0503
https://www.emerald.com/insight/publication/issn/0144-3585

 Abdulazeez Y.H. Saif-Alyousfi (2021) The impact of COVID-19 and the stringency

of government policy responses on stock market returns worldwide , Journal of

Chinese Economic and Foreign Trade Studies © Emerald Publishing Limited 1754-

4408 DOI 10.1108/JCEFTS-07-2021-0030

https://www.emerald.com/insight/1754-4408.htm

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