The Effect of Macroeconomic Determinants of Stock Price Movements in Nigeria

Udoka, Chris O.; Nya, Mfon Joseph; Bassey, James Godwin

doi:10.29121/granthaalayah.v6.i1.2018.1609

Cited by 6 publications

(4 citation statements)

References 8 publications

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“…They agreed that MTO had a positive and significant effect on stock return. Meanwhile, Udoka, Nya, and Bassey (2018) and Shammakhi and Mehrabi (2016) had different findings.…”

Section: Resultsmentioning

confidence: 98%

Market Liquidity and Stock Return in the Nigerian Stock Exchange Market

Abdullahi

Fakunmoju

2019

Binus Business Review

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This research examined the effect of market liquidity, inflation, and exchange rates on stock return in Nigerian Stock Exchange market. The researchers used ex-post facto design and employed secondary data subjected to Auto-regressive Distributive Lag (ARDL) bound test method of analysis within the period of twenty-one years. Findings reveal that in the short run, stock turnover, trading volume, exchange, and inflation rates have affected stock return positively and significantly. In the long run, market turnover has a positive effect. However, inflation and exchange rates have affected stock return negatively and significantly. Then, trading volume has a negative but insignificant effect on stock return, which is all at 5% level of significance. The researchers conclude that market liquidity, exchange, and inflation rates affect stock return. Therefore, the researchers recommend demutualization and transparent structures and adaptive method stabilization in exchange rate policies to increase stock market patronage, minimize transaction costs, and mitigate the market uncertainties.

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“…They agreed that MTO had a positive and significant effect on stock return. Meanwhile, Udoka, Nya, and Bassey (2018) and Shammakhi and Mehrabi (2016) had different findings.…”

Section: Resultsmentioning

confidence: 98%

Market Liquidity and Stock Return in the Nigerian Stock Exchange Market

Abdullahi

Fakunmoju

2019

Binus Business Review

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“…Musa and Ibrahim (2014), Asekome and Agbonkhese (2015), and Lawal, Somoye, Babajide and Nwanji ( 2018), all concluded that the stock market volatility is sensitive to changes in the selected macroeconomic variables. On the opposite side Inyiama and Nwoha (2014), Okoro (2017) as well as Udoka, Nya and Bassey (2018) discovered that macroeconomic variables cannot be used to determine explain share price movement. The divergence in research ndings call for further examination on this subject which was one of the recommendations made by Okoro (2017).…”

Section: Background To the Studymentioning

confidence: 99%

“…In Nigeria, Udoka, Nya and Bassey (2018), examined the inuence of gross domestic product, exchange rate, interest rate and ination rate on average stock price using the augmented dickey fuller unit root test and autoregressive distributed lag models in testing secondary data covering between 1986 -2014. The study model revealed no long run relationship between the explanatory and explained variables, and therefore suggested policies that will promote capital market investment in the country.…”

Section: Literature Reviewmentioning

confidence: 99%

Effect of Macroeconomic Variables on Share Price Movement in the Banking Sector in Nigeria

Nwankpa

2021

IJARSMF

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This study was to carried out to investigate empirically the effect of macroeconomic variables on share price movement in Nigerian Banking Industry within the periods from 2010 to 2019. Three macroeconomic variables were chosen as the independent indices; including the exchange rate, inflation rate, and foreign portfolio investment. For the movement of the share prices, the Nigerian banking sector index was used as proxy. Information from the annual time series covering the period between Q1 2010 and Q4 2019 was used. Analysis from the study showed that foreign exchange rate, and foreign portfolio investment are both significant in determining the movement of share prices of the deposit money banks in Nigeria during the period studied. On the other hand, inflation was insignificant which implies that it cannot be used to explain variations in share price movement in the banking sector of Nigeria. Based on these findings, the study recommended that there is need to formulate macroeconomic policies aimed at reducing the high dependence on imported products. This will curtail depreciation of the Naira, as well as high inflation rate. There is also need to promote local participation in the Nigerian equities market so as to cushion the adverse effect of foreign portfolio investors' incessant entrance and exit strategies.

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“…This is because of the macroecoecomic inducement of variables like the comparative low interest rate, closure of the border, and timely approval of 2020 budget, reduced valuations of companies based on their fundamentals and banks application of 65% loan to deposit Ratio (LDR) at year end within the economy and equity prices, all things being equal. Other relevant studies which had made meaningful impact on macroeconomic factors that influence stock market development were: (John & Duke II, 2013;Garcia & Liu, 1999;Ayunku & Etale;Umar, Gambo, Dayyaby & Darussalam, 2015;Udoka, Nya &Bassey, 2018;Tarus, 2012;Tsurai, 2018 andAzeez &Obalade, 2019). Few other scholars laid emphasis on both macroeconomic factors and institutional qualities of stock market development (Cherif & Gazdar, 2010;and Acquah-Sam, 2016).…”

Section: Introductionmentioning

confidence: 99%

Analyses of Macroeconomic Drivers of Stock Market Development in Nigeria

Obeten OKOI,

Ugboaku IHEANACHO,

Gbenga LAWAL

2022

AKSUJOMAS

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The paper investigates the long run and short run relationship between the endogenous variable (stock market development) and exogenous variables (economic growth, banking sector development, inflation, stock market liquidity and trade openness) in Nigeria. Annual data were collected using desk survey approach. Autoregressive Distributed Lag (ARDL) test and ARDL error correction regression model was used after preliminary tests were carried out to ascertain stationarity properties. From the result of the analyses, it was discovered that gross domestic product, domestic credit to private sector and trade openness has negative impact on Nigeria stock market development in the long run, whereas inflation rate and total value of shares traded had a positive impact on the development of the Nigeria stock market in the long run. The results suggested that domestic credit to private sector, stock market liquidity, ratio of credit to private sector, total value of traded stock as well as ratio of trade openness are key drivers of stock market development in Nigeria. As part of recommendations, government should strengthen and solve the weaknesses affecting development of Nigeria’s stock market. Policy makers should pursue those policies that stimulate banking sector development so as to promote immediate development of the stock market and government should intensify efforts in stability of inflation rate so as to promote stock market development in the long- run.

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The Effect of Macroeconomic Determinants of Stock Price Movements in Nigeria

Cited by 6 publications

References 8 publications

Market Liquidity and Stock Return in the Nigerian Stock Exchange Market

Market Liquidity and Stock Return in the Nigerian Stock Exchange Market

Effect of Macroeconomic Variables on Share Price Movement in the Banking Sector in Nigeria

Analyses of Macroeconomic Drivers of Stock Market Development in Nigeria

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