A comparative study on the impact of COVID-19 pandemic and exchange rate on the stock market returns of the Philippines and Thailand

• Main Authors: Go, Jan Gavin Santos, Llana, Bea Jilian Banaag, Uy, Reignard Alric Chong, Yaneza, Aaron Elian Lardizabal
• Format: text
• Language: English
• Published: Animo Repository 2022
• Subjects: Stock exchanges and current events—Philippines; Stock exchanges and current events—Thailand; Stocks—Philippines—Rate of return; Stocks—Thailand—Rate of return; Foreign exchange rates—Philippines; Foreign exchange rates—Thailand; COVID-19 Pandemic, 2020- —Influence; Finance and Financial Management
• Online Access: https://animorepository.dlsu.edu.ph/etdb_finman/26; https://animorepository.dlsu.edu.ph/context/etdb_finman/article/1037/viewcontent/A_Comparative_Study_on_the_Impact_of_COVID_19Edited.pdf
• Institution: De La Salle University

The study focuses on the relationship between the COVID-19 variables and the exchange rate that impact the stock market returns of Thailand and the Philippines at this certain time when most people are experiencing hindrances when it comes to coping with the current situation. Previous studies show that macroeconomic variables such as GDP, treasury bill rate, consumer price index, and exchange rate have an influence on the stock market. Stocks underperformed and returns dropped during the COVID-19 pandemic, leading to the conclusion that investing in stocks is crucial during this period. Additionally, the performance of the stock market and the number of COVID-19 cases were also found to be inversely related according to studies conducted previously. A comparison of the returns of the stock market returns of the respective countries is conducted. Moreover, the group examined the relationship between COVID-19 variables and the exchange rate to the stock market returns. The variables in COVID-19 include reported cases per day, reported deaths per day, government quarantine and lockdown protocols, and the reported vaccinations per day. The researchers conducted a multiple regression analysis wherein the COVID-19 variables are considered as the independent variables, and the exchange rate as the dependent variable first, then the independent variable as the second, while the stock market returns of the two countries as the dependent variable for both statistical tests. The researchers will be using data from the two countries of the Philippines and Thailand. Aligned with the outcomes of previous studies found by the research, the regression model was proven to be significant. The researchers conducted a separate analysis which was revealed to be both supporting and contradicting what had been initially hypothesized by the researchers. Furthermore, the effect of the Lockdown Protocols on the stock market returns of the Philippines is parallel to its significant effect on the stock market returns of Thailand, and the Lockdown Protocols have proven its significance and positive impact on the stock market returns of both countries, yet some independent variables were found to be insignificant. Thus, this entails that investors from Thailand and the Philippines aren’t significantly impacted by their investment decisions even during the height of the pandemic.