Operational Efficiency Dynamics of the Nigerian Stock Market (1986-2010)

Abstract

The study investigated the operational efficiency of the Nigerian stock market between 1986-2010. This was necessary given the degree of thinness of the market. The objectives of the study were: to investigate the extent to which the operations of the market have contributed to the growth of the Nigerian economy and also to determine the functionality of the market. To achieve these objectives data were gathered on some capital market indicators from the stock exchange factbook of various years on market capitalization (MCAP), all share index (ASI) volume of transaction (VOLT) value of transaction (VALT) and number of listed companies (NLC) on the stock exchange. The data were tabulated, analyzed and tested using the ordinary least square statistical technique. Findings resulting from the test of data showed that NLC, VOLT, VALT, ASI and MCAP were positive and that increase in any of the above parameters would in turn cause an increase in the growth of the Nigerian economy at five and ten percent levels of significance. It further showed that the market was operationally weak form efficient. It was therefore recommended that government should continue to provide better macro-economic environment for the private sector to lead the economy on the part of sustainable growth and development.

Volatility and Stability of ESG Equity in Indonesia toward Internal and External Shocks

“…Another interesting finding is that Islamic equity has proven to be the most stable in all periods. It is in line with Husin et al (2013), Udoka and Anyingang (2013), and Jefferis and Okeahalam (2000) on the impact on Islamic equity markets utilizing both local and foreign market factors, which could infer the external influences. Before, Khatatbeh et al, Chaudhary et al (2020), Alam and Chavali (2020), Maher et al (2020), and Alali (2020 examined the global pandemic and its impact on stock markets.…”

“…These findings suggested that equities volatility and market turbulence had comparable long-run connections. It is consistent with Udoka and Anyingang (2013) for the Nigerian equity market from 1980 to 2009 and Jefferis and Okeahalam (2000) for three Southern African equity markets from 1985 to 1995, using both domestic and foreign economic factors on real equity market returns in South Africa, Zimbabwe, and Botswana. negative impact on 11 major stock market indices.…”

“…Then, according to Barakat et al (2016), there was a positive link between the exchange rate and equities market performance. Besides, the external variables may be assumed based on the research performed by Husin et al (2013), Udoka and Anyingang (2013), and Jefferis and Okeahalam (2000) on the impact on Islamic equities markets utilizing both local and foreign market factors. In comparison, Khatatbeh et al (2020) and Alali (2020) investigated the global pandemic and its impact on stock exchanges.…”

The Effect of Macroeconomic Determinants of Stock Price Movements in Nigeria

“…According to Soludo (2004), there is a high level of volatility in stock prices as a result of the fluctuations in the market, especially as the pressure aimed at interest rate control towards market prices are most likely to reflect funds scarcity and inflation. The investors and public confidence will be engineered if the efficiency of the market is operational, and they will part with their funds willingly into security investments with the confidence of earning high returns (Udoka & Anyingang, 2014). The stock market does not operate in isolation; the market reacts to factors within and outside the economic system such as global events, government economic policies, changes in regulatory environment, and instability in political climate which poses negative influence to business and investing community.…”