Fundamental Analysis of Stock Returns of Non-financial Firms Listed at the Nairobi Securities Exchange

Fredrick, Ogilo; Muiva, Benard Nthenge

doi:10.13189/ujaf.2015.030302

Cited by 5 publications

(9 citation statements)

References 36 publications

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“…Therefore, the higher this ratio, the higher the stock returns, the higher the value-added, and the higher the investor's confidence. The results of this study are consistent with the results of research conducted by Saniman (2007), Fredrick and Muiva (2015) and Khotimah and Murtaqi (2015) which states that the TATO has a significant positive effect on stock returns.…”

Section: Discussionsupporting

confidence: 92%

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Fundamental Factor Analysis on Stock Returns Based on the Panel Data of LQ'45 Index

Sumani

2020

Hasanuddin Econ. Bus. Rev.

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This study aims to investigate the influence of fundamental factors on stock returns on the companies listed in the LQ’45 index in the Indonesia Stock Exchange. This research uses explanatory research design. The population consists of 45 companies listed in the LQ'45 index. The purposive sampling technique is used and collected a total of 23 companies as the sample. The number of samples was 23 companies because these companies consistently formed the LQ'45 index for the 2014-2018 periods. Those companies are fulfilling the criteria which are continually included in the LQ’45 index throughout the analysis period. Thus, the data panels used in this study were as much as 115 observations. Fundamental factors proxies by TATO, MBV, CR, DER, NPM, and EPS. The multiple linear regression analysis is used and the results showed that TATO has a significant positive effect on stock returns, MBV has a significant negative effect on stock returns, while CR, DER, NPM, and EPS have no significant effects on the stock return of LQ’45 index-listed companies.

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Section: Discussionsupporting

confidence: 92%

“…The results of this study are consistent with research conducted by Suselo et al (2015) which states that the DER has no significant effect on stock returns. The study supported Fredrick and Muiva (2015) but did not support the research of Muhammad and Ali (2018), Bintara and Tanjung (2019).…”

Section: Discussioncontrasting

confidence: 56%

Fundamental Factor Analysis on Stock Returns Based on the Panel Data of LQ'45 Index

Sumani

2020

Hasanuddin Econ. Bus. Rev.

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“…Some of the studies that reported a positive relationship between accrual anomaly and stock market returns include Baloch (2015), Hasanbaglou, and Salteh (2016), and Solomon, Memba and Muturi (2016). However, Machdar, Manurung, and Murwaningsari (2017) and Fredrick and Muiva (2015) reported a negative relationship.…”

mentioning

confidence: 95%

“…When investors only fixate earnings, they overprice (underprice) the firms with relatively higher (lower) levels of total accruals, normal accruals, or abnormal accruals (Ozkan & Kayali, 2015;Memba & Muturi, 2016). In addition, the accrual components of current earnings cannot be estimated as mispricing is corrected after the future earnings are realized lower (higher) than the expected and this is predicted to generate negative (positive) abnormal returns (Baloch, 2015;Machdar, Manurung, & Murwaningsari, 2017;Solomon, Memba, & Muturi, 2016;Fredrick & Muiva, 2015).…”

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confidence: 99%

The Role of Accruals Anomaly on Stock Market Return of Non-Financial Firms Listed on the Nairobi Securities Exchange

Nabosu

M’ithiria

2022

JOFA

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The accrual anomaly arises due to the market mispricing of the total accruals and their components and the investors fail to incorporate the differential persistence of the cash flow components and accruals of firm earnings. This study sought to determine the effect of accruals anomaly on stock market return of non-financial firms listed on the Nairobi Securities Exchange. The study adopted positivism as data collection and hypothesis development and testing was achieved. The study used quantitative research design to correlate study variables using mathematical analysis methods. Correlation results indicate that accrual anomaly was negatively and significantly associated to stock market return of non-financial firms. Regression results for the static model indicate that accrual anomaly and stock market return of non-financial firms is negatively and significantly related. The results for the dynamic model indicate that accrual anomaly and stock market return is negatively and significantly related. The study concluded that accruals anomaly has a negative and significant effect on stock market return in non-financial firms on the Nairobi Securities Exchange. The analysis concluded that the accrual anomaly has implications because firms with high reported accruals exhibit lower stock market returns. High valuations of the investors are related to accruals because of the accounting distortions. The study recommends that having knowledge regarding accrual toward stock return in the future will help the investors to minimize the earning prediction error so that investors can make appropriate decision making. The study recommends for the investors to implement the investment strategy, which to short (sell) low accrual stocks and long (buy) high accrual stocks in Nairobi Securities Exchange with prediction that the stock gains higher return in the future based on the prevailing investor projections. Keywords: Accruals Anomaly, Stock Market Return & Non-Financial Firms Listed

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“…Stock market returns play significant roles in the economy. They provide useful signals regarding the future state of the economy, including economic and financial status (Concetto & Ravazzolo, 2019;Dalika & Seetharam, 2015;Fredrick & Muiva, 2015). Their stochastic behavior provides information concerning market expectations and risk attitudes of investors in the market (Bintara & Tanjung, 2019;Duy, & Huu Phuoc, 2016;Gu & Li, 2018).…”

Section: Introductionmentioning

confidence: 99%

Investor Sentiment and Stock Market Return of Non-Financial Firms Listed on the Nairobi Securities Exchange

Nabosu

M’ithiria

2022

JOFA

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Investor sentiment is associated with attitude, thought, feeling, mood, belief, judgment, or expectation of market performance. The sentiment feeling is associated with investors' cognitive comparisons in their investment as well as their experience in making an investment decision. This study examined the effect of investor sentiment on stock market return of non-financial firms listed on the Nairobi Securities Exchange. The study adopted positivism as data collection and hypothesis development and testing was achieved. The study used quantitative research design to correlate study variables using mathematical analysis methods. The correlation results indicated that investor sentiment portrayed a positive association to stock market return. Regression of coefficients of the static model results indicate that investor sentiment and stock market return of non-financial firms listed on the Nairobi securities exchange is positively and significantly related. The results implied that there exist a positive and significant relationship between investor sentiment on stock market return since their coefficient values were positive. The regression coefficients result of lagged stock market return and stock market return was positively and significantly related. The regression of coefficients results indicate that investor sentiment and stock market return is positively and significantly related. The study concluded that investor sentiment has a positive and significant effect on stock market return in non-financial firms. These results imply that when investors are more optimistic about the market generating excess returns, their extreme optimism leads to more speculative activities that tempt them to invest even more. The study also shows that sentiment is relatively correlated with stock returns significantly over time. The study recommends that by taking the investor sentiment into account as a significant determinant of stock market volatility in asset price models, investors can enhance their stock returns. The results can inform on policymakers’ efforts to stabilize stock market volatility and uncertainty in order to protect investors’ wealth and attract more investors. Keywords: Investor Sentiment, Stock Market Return & Non-Financial Firms

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Fundamental Analysis of Stock Returns of Non-financial Firms Listed at the Nairobi Securities Exchange

Cited by 5 publications

References 36 publications

Fundamental Factor Analysis on Stock Returns Based on the Panel Data of LQ'45 Index

Fundamental Factor Analysis on Stock Returns Based on the Panel Data of LQ'45 Index

The Role of Accruals Anomaly on Stock Market Return of Non-Financial Firms Listed on the Nairobi Securities Exchange

Investor Sentiment and Stock Market Return of Non-Financial Firms Listed on the Nairobi Securities Exchange

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