DEVELOPED AND EMERGING STOCK MARKETS PERFORMANCE ONE YEAR BEFORE AND ONE YEAR AFTER THE FIRST COVID-19 OUTBREAK WITH ORIGIN IN WUHAN, CHINA

Abstract

This article investigates developed and emerging equity markets performance, one year before and one year after the first Covid-19 outbreak. In order to do this, the “Jensen's Alpha” is used, based on Fama & French five factors model, estimated by generalized least squares. The results indicate that during the crisis, the stock markets of Germany, Austria, Spain, the Netherlands, Portugal, Brazil, Chile, Malaysia, Russia, South Africa and Thailand destroy value while China and South Korea show a superior performance due to the effectiveness of their monetary and fiscal policies, and thus, becoming a relevant option for the refuge of global investors.