Unravelling the Impact of Macroeconomic Fundamentals on Stock Market Performance in Nigeria: An Ardl-bound Testing Approach

Kolapo, Funso Tajudeen; Oke, M. O.; Olaniyan, Temitayo O.

doi:10.9734/jemt/2018/40177

Cited by 9 publications

(11 citation statements)

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“…This result indicates that GDP significantly and positively impacts on share price index, thus, Ho4 is rejected and the alternative which states otherwise accepted. This result is in harmony with the findings of (Nijam et al 2015;Giri & Joshi, 2017;Kolapo et al, 2018) while objecting the findings of Gatsimbazi et al (2018).…”

Section: Test Of Hypothesissupporting

confidence: 90%

“…The study covered a period from 2000 to 2016 and discovered that the stock prices of Karachi Stock Exchange were significantly influenced by money supply, exchange rate and interest rate in the long run while in the short term, all the variables did not have influence but a negative impact was found with the exchange rate. Kolapo, Oke and Olaniyan (2018) assessed the impact of macroeconomic factors on stock market performance in Nigeria from 1986 to 2015 using Autoregressive Distributed Lag (ARDL) bounds technique. The study found evidence that Gross domestic product (GDP) and money supply had significant impacts on stock market performance in Nigeria.…”

Section: Empirical Reviewmentioning

confidence: 99%

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Evaluation of the Impact of Macroeconomic Variables on Stock Market Performance in Nigeria

Omodero¹,

Mlanga²

2019

BMS

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Stock market is an essential part of a nation’s economy and requires adequate evaluation of all factors that militate against its performance. This study investigates the role of macroeconomic variables in determining the stock market performance in Nigeria using annual time series data covering a period from 2009 to 2018. These data have been sourced from the World Bank Development Indicators, International Monetary Fund and CBN Statistical Bulletin. The results from the regression analysis indicate that exchange rate and interest rate do not have significant impact on share price index while inflation rate exerts a significant negative influence on share price index. On the contrary and in line with the concept of GDP and stock market performance, GDP significantly and positively impacts on share price index. The study among others suggests that the growth of the economy should be maintained to keep stock market flourishing while macroeconomic variables such as inflation, interest rate and exchange rate should be appropriately regulated by the relevant authorities to curtail all negative influences on stock market performance.

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Section: Test Of Hypothesissupporting

confidence: 90%

Section: Empirical Reviewmentioning

confidence: 99%

Evaluation of the Impact of Macroeconomic Variables on Stock Market Performance in Nigeria

Omodero¹,

Mlanga²

2019

BMS

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“…Ditimi, et al [6] found a significant effect of interest rate on stock prices. However, Kolapo, et al [8] found a negative but not significant effect of interest rate on stock market performance.…”

Section: Hypothesismentioning

confidence: 95%

“…However, Shrestha and Subedi & Jamaludin, et al [13,2] found a significant negative effect of inflation on stock market performance. Nevertheless, Kolapo, et al [8] found a positive effect of inflation on stock market performance.…”

Section: Hypothesismentioning

confidence: 98%

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Effect of Macroeconomic Variables on Stock Market Performance in Nigeria

John

2019

JEMT

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This paper aims at examining the effect of macroeconomic variables on stock market performance in Nigeria using annual time series data spanning 1981 to 2016.The data were obtained from Central Bank of Nigeria (CBN) Statistical Bulletin. Four macroeconomic variables, namely: money supply, interest rate, exchange rate and inflation rate were used as independent variables, while market capitalisation (proxy for stock market performance) was employed as the dependent variable. The results of Augmented Dickey-Fuller (ADF) test revealed that all the variables studied were stationary at first difference except money supply which was stationary at second difference. The Ordinary Least Square (OLS) regression results showed that money supply has a significant positive effect; interest rate has a significant negative effect; whereas, exchange rate has a positive but not significant effect and inflation rate has a positive but not statistically significant effect on stock market performance. The cointegration test results disclosed that there exist a long-run relationship between the macroeconomic indicators and stock market performance. The Granger Causality test results revealed that a unidirectional causality runs from money supply and exchange rate to stock market performance. In conclusion, money supply and interest rate are the true factors influencing stock market performance in Nigeria because they exhibited a significant effect on stock market performance. Whereas, exchange rate and inflation rate indicated a weak (non-significant) effect on stock market performance. Consequently, the recommendations are: monetary policies that favour the supply of money in the economy should be pursued in order to ensure a better performance of the stock market; Interest rate should be relatively low to guarantee a higher performance of the stock market because high interest rate has a significant negative effect on the Nigerian stock market.

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An investigation into aggregation bias: the case of stocks and treasury bill returns in Ghana

Dunyo,

Akwaa-Sekyi,

Frimpong

et al. 2024

Cogent Economics & Finance

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Unravelling the Impact of Macroeconomic Fundamentals on Stock Market Performance in Nigeria: An Ardl-bound Testing Approach

Cited by 9 publications

References 0 publications

Evaluation of the Impact of Macroeconomic Variables on Stock Market Performance in Nigeria

Evaluation of the Impact of Macroeconomic Variables on Stock Market Performance in Nigeria

Effect of Macroeconomic Variables on Stock Market Performance in Nigeria

An investigation into aggregation bias: the case of stocks and treasury bill returns in Ghana

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