Exploration of Safe Havens for Africa’s Stock Markets: A Test Case under COVID-19 Crisis

11 Pages Posted: 10 Sep 2020 Last revised: 17 Sep 2020

See all articles by Maurice Omane-Adjepong

Maurice Omane-Adjepong

University of The Witwatersrand

Imhotep Paul Alagidede

University of the Witwatersrand

Date Written: September 7, 2020

Abstract

The bear markets associated with the ongoing COVID-19 crisis present a test case to examine the traditionally expounded safe haven capabilities of gold and other precious metals, as well as the growing claims that bitcoin is the new “virtual gold” of our time. New evidence from our paper fails to corroborate such claims, however, we find bitcoin as a complementary safe haven asset. Further results show that none of the traditional safe havens and bitcoin could offer refuge for Africa’s emerging equity markets. Instead, gold and palladium outperform the other candidates to provide sanctuary for small-sized equity markets.

Keywords: Safe haven; Precious metals, Bitcoin; Africa’s stocks; COVID-19

JEL Classification: C32; G11; G15

Suggested Citation

Omane-Adjepong, Maurice and Paul Alagidede, Imhotep, Exploration of Safe Havens for Africa’s Stock Markets: A Test Case under COVID-19 Crisis (September 7, 2020). Available at SSRN: https://ssrn.com/abstract=3688625 or http://dx.doi.org/10.2139/ssrn.3688625

Maurice Omane-Adjepong (Contact Author)

University of The Witwatersrand ( email )

Johannesburg, 2193
South Africa

Imhotep Paul Alagidede

University of the Witwatersrand ( email )

1 Jan Smuts Avenue
Johannesburg, GA Gauteng 2000
South Africa

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