Abstract: This study examines the relationship between stock prices and exchange rates, specifically for developing countries. The reason for this focus is that financial markets in developing countries provide important reactions to global shocks. The Covid-19 pandemic, declared by the World Health Organization on 11 March 2020, is the most recent negative shock affecting the economies of these countries. This study thus investigates the relationship between stock prices and exchange rates to identify the effects of the pandemic on financial markets using weekly data for the BRICS and ASEAN (Vietnam, Malaysia, Singapore, Indonesia, the Philippines, Thailand) countries for the period 15 September 2017 and 5 September 2022. The data were employed within two different models, for the pre-pandemic and the pandemic period (measured in relation to the date of the declaration of the pandemic). Comparing the developments during the pandemic period with the pre-pandemic period is another aim of the study. A panel data method was used to examine the relationship between variables. According to the findings, while portfolio theory was valid for Malaysia, the Philippines, Thailand, Indonesia, Russia, India and South Africa in the pre-pandemic period, the traditional theory was valid for China. There was no relationship between the variables for BRICS and ASEAN countries in the post-pandemic period.

Keywords: Financial Markets, Exchange Rate, Stock Price, Panel Analysis.

JEL codes: B26, C33, F31, G15.

DOI: ...