Covid infection and death rate correlated with stock returns: BICM research

The number of Covid-19 infections and deaths is positively correlated with stock returns, according to a research by Bangladesh Institute of Capital Markets (BICM).

The research findings were revealed at a seminar held at BICM Multipurpose Hall on Monday, said a press release.

Samantha Rahman, master in economics at Sydney University, presented the keynote speech titled "Covid-19 and Stock Markets: Are Developing Economies Affected Differently from the Developed Countries?" at the seminar.

Dhaka University professor M Sadiqul Islam and United International University professor Mohammad Musa spoke at the programme presided over by BICM Executive President Professor Dr Mahmuda Akter.

BICM Director Wajid Hasan Shah conducted the session.

According to the research, Covid-19 pandemic has a negative impact on a country's stock market. The impact of pandemic on developing and developed economies may vary as the role of government in the spread of the disease, different government measures, and vaccine procurement may differ.

This research examines how the impact of Covid-19 on stock market returns is different in developed countries than in developing countries.

The research was conducted on 77 developed and developing countries from 1 January to 11 June 2020.

Professor Mohammad Musa said, "The sensitivity of any information in the stock market is very high.

He agrees with the findings of the study, saying that the stock return decreases due to the over-reaction of the investors in the first three months of Covid.