Abstract:
In recent past years, the Ghanaian Stock market has seen an increase in activities on the market but have also been experiencing high volatility. With the occurrence of the recent pandemic, COVID-19, the paper aims to determine if the fluctuation in the recent years can only be associated with the Pandemic or as a trend from past years. The study would look at the relationship between the performance of the Ghana Stock Market and the effect of the Pandemic with prior knowledge of the systemic risk of the various stocks on the Market.
I would first determine the systemic risk of the market using the Capital Asset Pricing Model (CAPM) by measuring the return of all 38 individual stocks listed on the stock market relative to the return of a 91-day treasury bill (risk free asset).
And with the prior knowledge of the systemic risk in the market, we would determine the volatility of the market before the onset of the pandemic, 2019, and post COVID-19, 2020 and compare the two results to determine how much the pandemic affected the Market as a whole.
We could also determine the volatility of the market post recapitalization of banks (The central bank introduced a recapitalization rule for all banks in the country in 2018), 2018-2019 as against COVID-19 period 2020 to date.
