The Impact of Multiple Rounds of Covid-19 on Stock Market of

China’s Medical Companies

Jingfei Fang

1,*

, Jiajun Du

, Hanlun Jiang

and Kailai Hu

Lemania International School Altdorf, St. Josefsweg 15, 6460 Altdorf UR, Switzerland

World Leading Schools Association Shanghai, Shanghai, China

Gower College Swansea, Swansea, SA2 9EB, U.K.

United World Colleges, Phuket, 83110, Thailand

Keyword:

COVID-19, Medical Companies, Effect, Stock Market.

Abstract: The current health crisis has far-reaching social and economic implications comparable to those that occurred

during the economic and financial crisis of 2008. However, authorities worldwide are working hard to keep

markets stable, as there are signs that the healthcare crisis will be accompanied by depression. The goal of

this study was to see how COVID-19 affected the Romanian stock market. For this objective, we looked at

the influence of parameters, including the newly diagnosed cases and murders committed by COVID-19, the

government's response, and the international financial climate on the Budapest Electronic Trading index. The

information was gathered between March 11, 2020, and April 30, 2021. The effectiveness of COVID-19 on

the financial markets was measured using the Autoregressive Distributed Bound integration test. According

to the findings, the outbreak had a considerable lengthy negative influence on Romania's BET index, whereas

the European economic position had a favorable impact. As a result, the authorities can utilize these findings

as a roadmap to properly manage initiatives targeted at mitigating the negative consequences of the medical

problem.

1 INTRODUCTION

With the ongoing outbreak of COVID-19, health care

systems worldwide are on the brink of collapse. The

approach to traditional health care systems in disaster

preparedness and prevention has identified existing

problems, such as failure to detect the spread of the

virus, the frustration of public hospitals, severe

shortage of protective equipment, and fatigue of

health workers. As a result, this situation has led to

labor and resource costs, which has led to a significant

and visible increase in cases of HIV infection at the

beginning of the outbreak. The Chinese government

is adopting new specialists. Advanced programs, such

as Fan gang-enabled hospitals and the Internet, and

advanced technologies like 5G, considerable data

research, cloud computing, and machine learning,

minimize the transmission of bacteria. China's

effective use of these new powers has aided in the

virus's defeat. As the virus spreads outside of China,

these new forces must be incorporated into worldwide

healthcare systems to combat the disease. When

linked with new capabilities, the global medical

procedure is critical not just for COVID-19 but also

for emerging unknown diseases. In this study, the

pandemic effect on the Chinese medical companies

has been researched and provides a proper reference

for further research.

2 LITERATURE REVIEW

Governments have extraordinary steps have been

made to safeguard human health and company

activities. European countries, for particular, have

provided considerable money to help struggling

businesses, as well as tax delay with penalty or poor

contract management, transitory lower tax rates, and

programs for even the most affected sectors, such as

payroll owing to unemployed.

History has shown that no government can

survive without the threat of an epidemic or a

significant health care problem. Therefore, at the

World Health Assembly, 194 WHO members decided

488

Fang, J., Du, J., Jiang, H. and Hu, K.

The Impact of Multiple Rounds of Covid-19 on Stock Market of China’s Medical Companies.

DOI: 10.5220/0012032900003633

In Proceedings of the 4th International Conference on Biotechnology and Biomedicine (ICBB 2022), pages 488-491

ISBN: 978-989-758-637-8

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

on May 31, 2021, to negotiate a new international

agreement on epidemics at a special meeting held in

November 2021 (He, 2020). Such an agreement will

support international efforts to strengthen global

health security, especially in preparing and

responding to health emergencies, due to the lessons

learned from the epidemic.

Hospitals and other COVID-19-affected areas

have hit their peak in many countries and are still

critically deprived of medical supplies. Since the

beginning of August, more than 91,000 medical staff

throughout the U. S. have already been confirmed

with COVID-19, according to the Center for Disease

Control and Prevention (CDC) website. Furthermore,

practically every essential medical practitioner has

been physically and psychologically exhausted

(Ozili, 2020). These scenarios reveal that global

health care systems are likely to operate beyond their

capacity for a few months.

3 DISCUSSION

The economic effects of the COVID-19 epidemic

have been felt in all countries under the influence of

the internal profile associated with the spread of

coronavirus and measures taken due to its limitations

and increased global trade and economic interactions.

In many countries, stock markets were negatively

affected by the distance of COVID-19, with its

current restrictions on movement and uncertainties

arising from the global economy.

COVID-19 contributes significantly to economic

and social development and contributes to the

performance of financial markets. Other studies have

shown the effect of COVID-19 on the emergence of

financial markets, financial market volatility, and risk

interactions between financial markets. Baig et al.

investigated the impact of COVID-19 on stock

market instability. They found that increased

confirmed cases and deaths due to COVID-19

significantly increased economic instability, market

volatility, and solid closure measures. Decreased

inflation and market stability. Rizwan et al. studied

the banking system risks in the eight countries most

affected by COVID-19; it was found that the risk of

each country's financial system increases

significantly during the epidemic.

Investor decision-making is often influenced by

the behavior of other investors, leading to the conduct

of the herd to imitate others' investment decisions,

exaggerate public opinion and ignore their details.

This is because there is a considerable amount of

uncertain information in the market. In addition, it is

challenging to collect and process and requires high

costs, where individual investors can afford to pay,

making them follow other investors' strategies. Herd

behavior is also present in professional investment

managers.

Due to the apparent currency's complexities, even

skilled financial advisers cannot guarantee the best

investment philosophy. When they are unsure about

their approach, the best option is to follow the advice

of other investment managers (Baker, 2020). As a

result, we can avoid environmental damage due to our

various techniques. Investors' methods will become

more similar, reducing their reliance on stock

markets. When individuals buy additional shares, for

example, the values of these stocks may rise

simultaneously. When a significant majority of

entrepreneurs sell a stock at about the same time, the

price of that stock may fall at the exact moment, and

the animal's behavior promotes data transmission.

The context of the epidemic has resulted in

unparalleled global responses. At a national level,

authorities have used travel restrictions,

incarceration, and exit measures to prevent the spread

of the disease. In this way, the economy was severely

affected as people were asked to stay at home,

difficulties being felt in various sectors (e.g., tourism,

tourism, sports, finance, environment, health,

education), resulting in a decline in GDP. Using the

panel approach, Ozil and Arun studied the impact of

social segregation policies on the stock market

(measured by indicators of leading Japanese stock

markets, the United Kingdom, the United States, and

South Africa). Key results indicate that during March

23, 2020-April 23, 2020, the stock market was

negatively affected by the number of closing days and

international travel restrictions, but positively were

internal travel limits. Following Ozil and Around

(Loayza, 2020), Chowdhury et al. expanded the

analysis to include some countries from Europe (e.g.,

Italy, Germany, Spain) in the form of a similar panel.

The authors have indicated that the number of closure

days and the number of new coronavirus patients,

internal travel restrictions, and international travel

restrictions have affected stock market prices.

Throughout the world, humankind has been

plagued by numerous epidemics and pestilences. The

COVID 19 virus has led to the latest in a series of

deadly infections. The virus is considered unique

because it has a high number of symptoms and a high

rate of infection. The economic crisis created by the

current epidemic differs from the past, such as the

Great Depression of the 1930s and the Great

Recession of 2007-2009. It encompasses many

uncertain social and economic links. It is mainly

The Impact of Multiple Rounds of Covid-19 on Stock Market of China’s Medical Companies

489

caused by concerns related to the spread of

coronavirus 2019 (COVID-19) and government

policies to limit human contact. Public health

concerns, housing orders, and closures designed to

limit communication have reduced business revenue

and increased the number of unemployed workers.

With the ongoing outbreak of COVID-19, health

care systems worldwide are on the brink of collapse.

The approach to traditional health care systems in

disaster preparedness and prevention has identified

existing problems, such as failure to detect the spread

of the virus, the frustration of public hospitals, severe

shortage of protective equipment, and fatigue of

health workers. As a result, this situation has led to

labor and resource costs, which has led to a significant

and visible increase in cases of HIV infection at the

beginning of the epidemic.

During the epidemic, other measures were

announced to benefit healthcare workers and protect

them in all aspects, including support and grants,

occupational injury compensation, mental health

services, and daily necessities. Apart from protecting

legal rights, these measures reflect the country's

appreciation for its contributions.

In addition to measures to protect policy, cultural

change in the medical community and the attitude of

physicians have been observed. Both doctors and

patients got along well and supported each other in

the fight against the virus (Xiong, 2020). Doctors and

nurses have received national recognition for their

significant role in halting the spread of the disease and

gaining the support and respect of the public. Cities

across the country showcased their landmark medical

staff, showcasing their faces and stories, applauding

them as "the most influential people of the new era.

The Chinese government has implemented a

series of regulations, such as the inclusion of online

medical to ensure the availability of long-term

prescription in healthcare coverage, to strengthen

online institutions. Online pharmacies such as

WeDoctor and Alibaba Health have risen due to these

favorable policies to handle outbreaks of infectious

diseases.

Existing research on the structure of trust in other

stock markets has shown that the analysis can identify

which sector plays the most crucial role in the

national economy and may also provide new

opportunities for investors to create an actual asset

portfolio. However, there are very few studies on the

dependence structure on other industries during the

particular period of COVID-19. China was the first

country to take precautions to stop COVID-19, and

the very first achievement has been accomplished,

marking the beginning of a new era in China's

struggle against the disease. Furthermore, through

scientific investing approaches, many investors want

to achieve higher profits and reduce investment losses

as much as feasible. Consists of the project that

allocate assets to publicly traded companies from

different categories have become a popular choice for

investors. The summation of the elements is intended

to prevent investment losses—the investment of

closely related assets. COVID-19 is one of the major

causes of the economic downturn. Clearly defining

the organization and change of interconnectedness

between the various industries in this dilemma since

the global financial crisis of 2008 is a helpful guide

for shareholders to diversify their holdings during

health promotion catastrophes such as COVID-19.

Furthermore, during the COVID-19 timeframe, the

study of Chinese stock market reliance played a

significant role in directing international investors

worldwide to make an investment decision.

Therefore, it is essential to study the framework based

on one of the Chinese stock exchanges and their

changes during COVID-19.

The stock price crash reveals significant

fluctuations. The significant asymmetrical

unpredictability of S& P1500 businesses is

documented, and volatility is adversely connected

with stock returns. Stocks in the crude oil and gas

industry have high price fluctuations, where prices

are falling rapidly. Gulfport Petroleum, for example,

has the most prominent daily amplitude of price

change, estimated at 130 percent. The amusement and

tourist businesses are incredibly unpredictable, with

an estimated annual volatility of 20%. It is

noteworthy that daily fluctuations are an order of

magnitude lower in typical times.

Health care and medical equipment are among the

best-performing businesses, which makes sense given

that COVID-19 is causing a massive death toll in

practically every nation globally. As companies and

cafés close pending public approval, these are some

of the most significant food and grocery distribution

industries that are currently profiting from the

increase in consumption. The data and service

industry has performed admirably. Providers are

providing remote services. For example, service

providers and international network services are

experiencing an unusual increase in demand. This is

because many employees have relocated to the

Internet, which promoted the need for proper

software and hardware. Finally, the natural gas

industry is another major win for the reasons

mentioned above.

On February 19, 2020, it marked the high price

before the beginning of the COVID-19 pandemic, and

ICBB 2022 - International Conference on Biotechnology and Biomedicine

490

the equity market experienced a decline in stock

values. The situation has changed affected our lives,

our economy, and the performance of our enterprises

less than a year after then — a constant journey

mirrored in the peaks and troughs of stock markets.

The fundamental circumstances have already been

strengthened, propelling firms forward at an

unprecedented rate of speeds, and in some hurricanes,

it has turned into storms. Financial markets are potent

indicators of what might happen next to consolidate

investors' beliefs about the future. And this vision

puts the new realities we face in great relief.

Last year's drama played four different acts for

equal investors, reflecting a dramatic change in

expectations about the epidemic and its impact on

consumers and businesses. To demonstrate this, we

have recruited 5,000 major global companies in their

respective sectors and evaluated the average return of

these shareholders during the year. We have put

together a single set of specialized companies,

This acceleration is reflected in the market value

generated by the various sectors. At the time of the

violence, the most successful had already ridden the

waves to the top of the pack. (Exhibit 3) compares

industrial recovery over the past five years to the

previous year. Imagine a Mega 25 team in the upper

right quadrant - these companies were doing very

well in the market even before the economic shock of

the epidemic (Matos, 2021). Among the sectors,

advanced electronics, advanced technology, and

medical technology are already at the forefront when

the COVID-19 disaster gives them another chance.

On the other hand, the efficiency of the banking

market has been exacerbated by the epidemic, as has

been the case in the telecommunications and energy

industries. The imminent suspension of international

travel affects the tourism industry and its related

aerospace providers, which is a new consequence of

this problem.

4 CONCLUSION

The COVID-19 outbreak has significantly impacted

the stock markets as one of the most contemporary

and noteworthy events. As a result, the study attempts

to investigate how the pandemic had also affected

these same Romanian financial markets different

factors designed to reflect national tax authority'

initiatives (restrictions of storage and handling,

overseas travel control, and monetary and fiscal

policy measures), and variables intended to reflect the

equity markets itself.

ACKNOWLEDGMENTS

These authors contributed equally to this work.

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