Impact Of Monetary Policy on Stock Market Development: Implications for the Nigerian Economy (Published)
The unsustainable and decreasing contribution of the Nigeria stock market to economic growth and development is the rationale for this study. Previous studies were unable to fully address the core developmental problems of the stock market in terms of its contribution to economic growth. These studies focused on how the monetary authorities can stabilize the stock market and reduce its volatility but ignored issues bordering on the contribution of the stock market to economic growth, which of course is the essence of any stock market and as such characterize its development. Consequently, the objective of this study is to investigate the impact of monetary policy on the development of the stock market in Nigeria. The study period covered from 1981 to 2015. Cointegration and vector error correction modelling (VECM) were employed for the analysis. The cointegration test indicates that there exist long run equilibrium relationship among the variables of the model. VECM result indicated that monetary policy, through the growth rate of money supply has impacted positively and significantly on the development of the stock market in Nigeria. Also, findings further indicated that prime lending rate has had a negative impact on the development of the stock market in Nigeria. The study recommended among others, that the Central Bank of Nigeria (CBN) should use its growth rate of money supply to further boost the development of the stock market but must however be mindful of the channeling of the increase in money supply in order to curtail the possible negative impact of inflation.
Financial Reporting Quality and Its Effect on Investment Decisions by Nigerian Deposit Money Banks (Published)
The study investigated the effects of financial reporting quality on investment decision making by Deposit Money Banks in reference to Zenith Bank Plc, Nigeria. Data obtained from the audited annual reports of Zenith Bank Plc that covered period of 2009 – 2016.The study utilised both Descriptive and Ordinary Least Square Regression method with the aid of using E-view 9 to analyse the data. The findings showed that, there was a significant effect of variables of (Financial Reporting Quality FRQ measures as profit after tax, cash used in/ from investing and cash and cash equivalent) on investment. The result also shows that, Financial Reporting Quality has significantly influenced on investment of Deposit Money Banks with (R2 = 0.98; P <0.05). The study concluded that, higher financial reporting quality increases investment decision by Deposit Money Banks in Nigeria.
The paper uses panel data spanning from 2011 to 2015 to examine the differential earnings quality of Deposit Money Banks (DMBs) and insurance companies listed on the Nigerian Stock. We employ two proxies of earnings quality as dependent variables in running logistic regression and Generalised least square (GLS), all based on random effects, to test the hypothesis that DMBs are likely to exhibit higher earnings quality than insurance companies. We fail to document evidence to support our hypothesis. We recommend for research employing richer data set with more proxies of earnings quality.
Effectiveness of Audit Committee Practices and the Value of Listed Deposit Money Banks in Nigeria (Published)
This research study examines the effectiveness of audit committee and as well explores the relationship between audit committee effectiveness and the value of deposit money banks in Nigeria. The followings were identified as audit committee characteristics (Internal control, the integrity of financial reporting, commitment of audit committee members and meeting) and were used in identifying the effectiveness of audit committee. Eight questions-survey questionnaires related to the four identified characteristics were administered to 55 respondents spread amongst the five sampled banks. The questionnaire enables the study to seek the perceptions of the respondents on the effectiveness of audit committee in deposit money banks in Nigeria. The Chi Square statistical tool was used to test the two study’s hypotheses. The study finds that the Characteristics of Audit Committee practices relates to the effectiveness of Audit committees’ of the deposits money banks in Nigeria, hence portraying the committee’s effectiveness in performing its functions, the effectiveness of audit committee does not necessarily improve or otherwise on the value of the deposits money banks and results also indicate that activities as relate meeting of the audit committees’ of deposit money banks are not clearly stated in the annual accounts of the banks. It therefore recommends that detail issues of meetings of audit committees be clearly stated and or included in the annual reports of the banks.
This study examines the effects of working capital management on the profitability of Deposit Money Banks (DMBs) quoted on the Nigerian Stock Exchange for single period of year 2013. The paper adopts Returns on Equity (ROE) and Returns on Assets (ROA) as dependent variables for profitability while Current ratio (CRR), Profit before taxation to current liabilities (PCL), Operating cash flow to current liabilities (OCL) and Cash balance to total liabilities (CTL) are proxies for working capital and as well independent variables. The annual account and report of all the eleven banks quoted on the Nigerian Stock exchange as at 2013 served as the sources of data, regression was used to determine the relationship between the dependent and the independent variables, and the study finds that significant and positive relationship exist between the working capital management and the profitability of the DMBs in Nigeria. The findings indicate that the two profitability proxies are positively affected by all the elements of working capital management. The paper noted variety of components of working capital and profitability; this therefore means that banks are to ensure that appropriate management of working capital is essential for achieving its objective of maximizing the profitability.
THE EFFECT OF MERGER ON DEPOSIT MONEY BANKS PERFORMANCE IN THE NIGERIAN BANKING INDUSTRY (Published)
The study objective gives an insight into the effectiveness of economic policy reforms in the Nigerian banking industry. This study examines the impacts of merger on deposit money banks performance in Nigeria between 2000 and 2009. The period was characterized by financial deregulation, the Global economic crisis, and bank restructuring programs. The panel data ordinary least squares approach is the methodology employed to investigate if there is any significant effect on the performance of banks from the pre to the post merger periods, in order to detect whether bank mergers produce any performance gains in the Nigerian banking industry. The evidence shows that merger created synergy as indicated by the statistically significant increasing post-merger financial performances although banks should not jump at any merging opportunity that offers itself because the exercise is not an opportunistic one. We therefore recommend that merger being a relatively new phenomenon in the Nigerian banking environment should be given more encouragement by the regulatory authorities.