The first wave impact of COVID-19 pandemic on the Nasdaq Helsinki stock exchange : weak signal detection with managerial implications

Abstract

<div lang="en" class="abs"><p class="abs_header">Abstract</p><p>The global pandemic caused by the coronavirus disease (COVID-19) came mostlyas a surprise and had a major effect on the global economy. This type of major events that canbring societies to nearly a total standstill are difficult to predict but have a significant impacton business activities. Nevertheless, weak signals might be possible to detect beforehand toenable preparation for the impact, both globally and locally. This study analyses the impact ofthe first wave of the COVID-19 pandemic on the Nasdaq Helsinki stock exchange by utilisinglarge-scale media analytics. This entails gaining data through media monitoring over the entireduration of the pandemic by applying black-box algorithms and advanced analytics on realcases. The data analysis is carried out to understand the impact of a such global event ingeneral, while aiming to learn from the potential weak signals to enable future marketintelligence to prepare for similar events. A social media firestorm scale, similar to the Richterscale for earthquakes or Sapphir-Simpson scale for hurricanes, is utilised to support theanalysis and assist in explaining the phenomenon. The results indicate that pandemics andtheir impact on markets can be studied as a subset of a media firestorms that produce a sharkfintype of pattern in analytics. The findings indicate that early signals from such events arepossible to detect by means of media monitoring, and that the stock exchange behaviour isaffected. The implications include highlighting the importance of weak signal detection fromabundant data to have the possibility to instigate preventive actions and prepare for such eventsto avoid maximum negative business impact. The early reaction to this type of events requiresa very streamlined connection between market intelligence and different business activities.</p></div>