Pandemics and the Asia-Pacific Islamic Stocks

By Afees A. Salisu, Sikiru Abidemi Abdulsalam. 2020

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In this paper, we examine the potential of the Asia-Pacific Islamic stock market to serve as a good hedge against uncertainty due to pandemics and epidemics (UPE). Relying on a new dataset for UPE, we find evidence in favour of the hedging potential of the Asia-Pacific Islamic stocks against UPE albeit with lower hedging effectiveness during the COVID-19 pandemic. Further, results show improved out-of-sample forecasts of stock returns when using the UPE predictor.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/5d3321413cb3aabd4b02df7148f284f732f40948