English
Analysis of the effects of COVID-19 on companies listed on the Warsaw Stock Exchange
Bogna Kaźmierska-Jóźwiak
https://orcid.org/0000-0002-1692-7682Paweł Sekuła
https://orcid.org/0000-0002-1959-8378Błażej Socha
https://orcid.org/0000-0002-2422-6851Abstract
The spread of COVID-19 has been a huge shock to the economy. Countries around the world are facing unprecedented challenges due to the pandemic, and they have responded by locking down people’s movement and business activity and implementing stimulus packages to restrain the devastating slowdown in economic activity. The COVID-19 outbreak has had a decisive impact on the social and purchasing habits of people all around the world. New challenges for companies have arisen as a result. The main aim of the study is to investigate the effect of COVID-19 on the reaction of the stock market and of companies (those considered to have been most significantly affected by the disruption caused by COVID-19). The paper focuses on companies listed on the WSE. The study examines the rates of return of all companies listed on the Warsaw Stock Exchange (WSE), the major indices of the Warsaw Stock Exchange and industry indices. Moreover, the authors use the case study methodology to examine the implications of COVID-19 on corporate (managerial) behaviour. A content analysis is also applied: the authors analyse all current reports and quarterly reports of the selected companies throughout the analysed period. For the purposes of further analysis, the six largest companies (accounting for almost 98% of the index as a whole) from the WIG-clothes index, which recorded the largest decline in terms of the rates of return among all sector indices on the WSE, were selected. The analysis focuses on managerial decisions in response to the COVID-19 outbreak so as to examine the challenges faced by management during the COVID-19 pandemic and the potential actions undertaken by the firms. Therefore, the authors investigated the information regarding management in the areas of financial results, investment decisions, equity decisions, dividend decisions, and other important decisions. The analysis confirmed that the COVID-19 pandemic, due to the administrative decisions and substantial number of restrictions introduced by governments, brought about temporary closures and restrictions on the scale of operations, reducing the level of employment. As a consequence, a significant decline in revenues, as well as a deterioration in financial results and the creditworthiness of most companies, could be observed. Our findings contribute to the limited evidence on the reaction of the stock market and companies to the challenges posed by COVID-19.
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