This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate.This study empirically analyzes the determinants of bond market development in a cross section of 23 sub-Saharan African (SSA) countries between 1990 and 2008. It considers the stage of development and the size of the bond market, as well as the historical, structural, institutional and macroeconomic factors driving bond market development in SSA. The study finds that the savings constraint is a key impediment to domestic bond markets development as well as financial market deepening, as it results in a low level of financial intermediation by the banks. Overall, the results show that a confluence of factors matters for the development of domestic bond markets in SSA; these include structure of the economy, investment profile, law and order, size of the banking sector, the level of economic development, and various macroeconomic factors. Policy implications include increased efforts to strengthen the investment environment and the need for a regional approach to bond market development. JEL Classification Numbers: G15; G20; O16; R11

The purpose of this study is to re-evaluate the incremental information content of cash flows in explaining dividend changes, given earnings. I carry out an 882 firm-year study by analysing the dividend changes-cash flow relationship on a sample of 63 quoted firms in Nigeria over a wider testing period from 1984 to 1997. Despite the fact that I used a wider testing period than previous studies and more refined cash flow measures than previous studies, I also introduced dummy variables to capture economic policy changes in the economy. The association of cash flows with dividend changes is tested using the modified Lintner-Brittain model as adopted in Charitou and Vafeas (1998) on pooled cross sectional/ time series data from the full sample of observations from 1984-97. The models are estimated using the ordinary least squares (OLS) method and I do find a significant relationship between dividend changes and cash flow unlike previous studies. The empirical results reveal that the relationship between cash flows and dividend changes depend substantially on the level of growth, the capital structure choice, size of each firm and economic policy changes.

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An efficient market is one in which prices fully reflect available information. An implication of an efficient market is that no excess returns can be made from this information because current prices already reflect the information. However, excess returns (if any) should not be statistically significant from zero (Fox and Opong, 1999). The overall aim of this study is to test if the Nigerian stock market efficiently reacts to dividend announcements in price adjustments. This study extends and improves on previous studies by assessing the speed with which share prices adjust to the information contained in dividend announcements using daily data on the Nigerian stock market. The total number of announcements examined in the Notice to Dealing Members' File of the Nigerian Stock Exchange from 1991 to 1999 totalled 990. The study covered only 595 cases of annual dividend announcements during this period. To determine the short-run reactions to dividend, the author calculated market adjusted buy-and-hold returns for the samples for the three-day event period (that is from the day before the announcements to the day after), for the 21-day and 61-day event windows. The results revealed that there were excess returns and the cumulative excess returns were significant for 30 days before and until 25 days after dividend announcements for dividend paying firms. It points to the fact that the Nigerian stock market is not semi-strong efficient.Re´sume´: Un marche´est efficient si les prix actuels refle`tent toute l'information publique disponible. Un marche´efficient suppose que cette information ne peut eˆtre exploite´e pour re´aliser des gains, parce que les prix actuels la refle`tent de´ja`. Dans le cas ou`des gains peuvent o˜tre re´aliser, ils ne peuvent en aucune fac¸on eˆtre sensiblement supe´rieurs az e´ro, d'un point de vue statistique (Fox et Opong [1999]). La pre´sente e´tude a pour objectif global de ve´rifier si la Bourse des valeurs nige´riane est suffisamment re´ceptive aux de´clarations de dividende, lors de l'ajustement du cours d'une action. Elle vient comple´ter et ame´liorer des e´tudes ante´rieures sur cette question, en e´valuant la vitesse a`laquelle le cours d'une action s'adapte aux informations contenues dans des de´clarations de dividende qui utilisent les donne´es publie´es quotidiennement sur le marche´boursier nige´rian. Quelque 990 de´clarations figurant dans des avis de dividende e´mis entre 1991 et 1999, et classe´s dans les dossiers des courtiers membres de la Bourse des valeurs nige´riane, ont e´te´examine´s au total. L'e´tude ne porte que sur 595 de´clarations annuelles de dividende effectue´es durant cette pe´riode. Pour de´terminer la re´ceptivite´a`court terme du marche´boursier nige´rian a`l'e´gard de ces 595 de´clarations de dividende, l'auteur a calcule´-sur une pe´riode de trois jours (allant de la veille au lendemain du jour ou`les de´clarations ont e´te´effectue´es -les revenus ajuste´s des actions relie´es au marche´immobilier, achete´es et mises en sauvegarde, pour les guichets ...

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