Relationship Between COVID-19 Pandemic News and Stock Liquidity in The Stock Exchange of Thailand
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Abstract
Investor decisions are still heavily influenced by liquidity, and the COVID-19 pandemic has had an effect on the stock market. This study aims to investigate how COVID-19 epidemic announcements impact stock liquidity on the Stock Exchange of Thailand in order to better understand the relationship between COVID-19 outbreak news and stock liquidity. The study covers 484 firms with a total of 485,988 samples, collects COVID-19 outbreak reports from eight countries and runs from November 1, 2019, to January 31, 2022. According to the study's multiple regression analysis, stock liquidity increases when COVID-19 outbreaks are announced because investors perceive the outbreak as a temporary event. The study finds that while positive news enhances stock liquidity, negative news decreases it, as investors typically react more strongly to negative news due to fear. Therefore, investors should closely follow the news and analyze it carefully to ensure that their investment decisions are not influenced by panic caused by short-term negative news.
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