Industry-level analysis of COVID-19’s impact in emerging markets – evidence from Pakistan

Purpose - The main purpose of this study is to evaluate COVID-19’s impact on the emerging stock markets. Design/methodology/approach - To evaluate the influence of COVID-19, this study uses a novel method of event study methodology to measure the impact of COVID-19 on emerging stock markets. The research’s sample includes a total of 79 firms from 26 industries that are included in the KSE-100 Index from the Pakistan Stock Exchange. Three events were studied: (1) Announcement of the first case, (2) Start of lockdown and (3) End of lockdown. Findings - This study establishes the findings that industries in the Pakistan Stock Exchange were overall negatively affected by the COVID-19. Commercial banks, Insurance, Real Estate and Textile were badly affected by the COVID-19. However, the Pharmaceutical, Refinery and Food and Personal Care Products industries had shown a positive response. Practical implications - This study could bring in a new and useful insight into the literature on the impact of COVID-19 on the emerging stock markets. The results of this study provide insight to the investors in the emerging stock markets of the industries that are likely to show responses either negative or positive to news of regional or global outbreaks, lockdowns and end of lockdowns. Originality/value - The work on COVID-19 has been mostly limited to the developed markets and the emerging markets have been overlooked. This study is a potential gateway to future works regarding pandemics in emerging markets.