Investor Herd Behaviour During the COVID-19 Pandemic: Evidence from the Johannesburg Stock Exchange

(Pages 2192-2199)

Damien Kunjal1*, Saiurin Naidoo2, Caleb Moonsamy2, Thavania Govender2, Riley Naidoo2 and Ebrahim Ally2
1Department of Business Management, University of the Free State, South Africa.
2School of Accounting, Economics and Finance, University of KwaZulu-Natal, South Africa.


The COVID-19 pandemic has caused extreme volatility in financial markets globally. During periods of extreme volatility, investors tend to exhibit herd behaviour. However, herd behaviour results in market anomalies which causes incorrect valuations and pricing. Hence the objective of this study is to test whether COVID-19 has induced herd behaviour in South Africa’s stock market. To achieve this objective, the FTSE/JSE Top 40 Index is used as a proxy for stocks trading on the Johannesburg Stock Exchange. The cross-sectional absolute deviation (CSAD) methodology is employed, and the sample period ranges from July 3, 2017 to June 30, 2021 with March 5, 2020 dividing the pre- and post-COVID-19 periods. The results suggest an absence of herd behaviour in the FTSE/JSE Top 40 Index during the full, pre- and post- COVID-19 sample periods. Therefore, this study concludes that the COVID 19 pandemic has not induced herd behaviour in the South African stock market. This could indicate that stock investors on the JSE follow their own thought and decision-making processes in periods of extreme volatility. Moreover, this may suggest that the South African stock market is efficient and that investors execute rational and well thought out trades.


COVID-19, Herd behaviour, Johannesburg Stock Exchange, Pandemic, Stock Market.

How to Cite:

Damien Kunjal, Saiurin Naidoo, Caleb Moonsamy, Thavania Govender, Riley Naidoo and Ebrahim Ally. Investor Herd Behaviour During the COVID-19 Pandemic: Evidence from the Johannesburg Stock Exchange. [ref]: vol.21.2023. available at:

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