Financial Sector during the Coronavirus Outbreak : Evidence from An Emerging Market

This paper examines the impact of COVID-19 lockdown on daily stock returns of banks and financial institutions (BFI) in Vietnam. Employing the panel data regression models, this study examines the effect of daily COVID-19 positive cases to the stock returns – during pre-lockdown, lockdown, and after- lockdown period – of 74 listed firms in Vietnam from 2 May 2019 to 25 April 2021. The empirical results confirm that there was no significant impact of daily increased number of COVID-19 positive cases to the stock returns of BFIs in Vietnam throughout the entire study period. Furthermore, this study inquires the influence of pandemic period to the individual class of the BFIs sector in HOSE. It discloses that the commercial banks, development banks and microfinance companies’ stock returns were adversely impacted during the pre- lockdown and lockdown period. However, after-lockdown period had significantly rebounded the overall BFIs stock returns in Vietnam with the highest returns earned by microfinance companies and lowest return by commercial banks