The impact of COVID-19 pandemic on financial performance: Comparison between Egyptian SMEs Tamayoz and EGX30 index (early view)

Abstract

This paper seeks first to measure the consequences of COVID-19 on the financial performance through a comparison between the small and medium enterprises (SMEs) and listed corporations in the Egyptian stock exchange (EGX). Second, we examine the impact of governmental interventions on this association. Our sample includes 26 SMEs in the Tamayoz EGX and the highest 30 firms listed in the EGX 30. We applied pooled ordinary least square regression, paired sample test, and Barron and Kenny’s test. We used daily stock market returns from January 2020 to November 2020. The proliferation of COVID-19 has an influence on stock prices in both the EGX30 and Tamayoz stock indexes. We furthermore find a partial mediation of income support, facial-covering, school closures, and restrictions international movements on the linkage between COVID-19 and financial performance (FP) for SMEs. The stock prices listed in EGx30 seem to be sensitive to governmental interventions more than Tamayoz EGX. The findings confirm governmental interventions would have a significant role in the firms' financial performance during the COVID-19 pandemic.