Examining Key Macroeconomic Factors Influencing the Stock Market Performance: Evidence from Tanzania

Abstract

This study reflects on assessment of the micro economic factor hindering the growth of Dar es Salaam stock exchange market. The study intends to determine the factors influencing the development of Dar es Salaam stock exchange market. Four constructs based on the theory such as money supply exchange rate, inflation rate and interest rate were considered. The study followed the positivism approach where variables were analyzed quantitatively The multiple regression model is used to relate variables and stock exchange performance at Dar es salaam stock market. Findings in this study revealed that, four investigated variables in this study, one which is interest rate is found to have the hypothesized negative relationship with Dar es Salaam stock exchange index. The inflation rate, exchange rate and money supply were statistically insignificant explaining the variability of Dar es salaam stock exchange market. Although the research recommended that, the government should manage well the micro economic policies in order to give confidence to our investors and attract new investors. Researchers can use the study findings and explore on more variables that were not used in this paper, such research can even use different modeling techniques to investigate the variables in the study.

Testing The Indonesian Stock Market Arbitrage Pricing Model

“…Based on data analysis and hypothesis testing that has been carried out in this study. It can be seen that the risk premium oil price has no effect on expected return; these results are in accordance with research conducted by (Worlu and Omodero, 2017, Amata et al, 2016, and Gwahula, 2018. This is contrary to the previous hypothesis, which states that the risk premium oil price can have a negative effect on expected return.…”

“…( 6) Risk Premium Dow Jones Stock Price Index has a positive and significant effect on the expected return on the IDX, These results support the Arbitrage Pricing Theory multi-factor. The findings are in line with (Michael et al, 2021), (Yadav, 2021), (Gwahula, 2018), (Ihsan et al, 2017), (Torbira and Agbam, 2017), (Mohammad and Mazumder, 2021), (Obafemi et al, 2021), (Amata et al, 2016). Based on the result of the statistic prob t value in the second equation, the risk premiums interest rate, risk premiums inflation, and risk premiums of foreign macroeconomic factors are the representatives by Shanghai, and Dow Jones stock indexes have a significant effect on the expected stock returns at IDX.…”

“…Research the emerging market using a similar method to Chen et al researched Egypt's capital market (Ihsan et al, 2017), and (French, 2017) researched five ASEAN countries (Singapore, Thailand, The Philipines, Malaysia, and Indonesia), At Johannesburg stock exchange by (Ndlovu et al, 2018), at Nigerian capital market by (Michael et al, 2021) also (Obafemi et al, 2021), at Indian capital market (Yadav, 2021), at Tanzania capital market by (Gwahula, 2018), at Bangladesh Capital market by (Mohammad and Mazumder, 2021).…”

“…An increase in interest rate can result in low demand for non-essential items and services, which can have an impact on the company and its stock values. The description refers to (Amata et al, 2016, Gwahula 2018) and (Yadav, 2021). The risk premium of interest rate is interest rate risk sensitivity on stock return expectation.…”

Borsa İstanbul Mali̇ Endeksi̇ İle Makroekonomi̇k Deği̇şkenleri̇n Ardl Sinir Testi̇ İle Anali̇zi̇

“…DOLS testi sonucunda sanayi üretim endeksinin ve enflasyonun endeksi olumlu yönde etkilediği, faiz oranları ile reel ekonomik büyümenin olumsuz yönde etkilediği sonucuna ulaşmıştır. Para arzı, döviz kuru, enflasyon ve faiz oranının Tanzanya Dar es Salaam borsasına etkisini çoklu regresyon modeli ile araştıran Gwahula (2018), 2006 -2011 yılları arası dönemi araştırmıştır. Çalışma sonucunda faiz oranı dışındaki diğer değişkenlerin borsa endeksi ile olumlu ilişkiye sahip olduğu belirlenmiştir.…”