Global Uncertainty, Connectedness and Risk Spillovers Among Sub-Saharan Africa and MENA Equity Markets

The study examines the network connections between sub-Saharan Africa, the Middle East, and North African stock markets, considering the COVID-19 pandemic. Findings reveal that connectedness is high and heterogenous, particularly in extreme states, and in the lower and upper quantiles, exhibiting the most significant levels of connectivity and shock transmission. SSA and MENA markets have experienced shocks and have also emitted shocks in various market conditions. Transfer spillovers change across quantiles, potentially enabling investors to optimize their hedging strategies. Policymakers ought to consider the connectedness of the market and develop policies to tackle the sensitivity of asset prices.