Analysing Stock Market Reaction to Macroeconomic Variables: Evidence from Nigerian Stock Exchange (NSE) (Published)
This study examined the impact of some selected macroeconomic variables on stock market performance in the Nigerian Stock Exchange (NSE). The study adopted all share index (ASI) as proxy for stock market performance and the dependent variable, while the selected macroeconomic variables included broad money supply (BMS), interest rate (ITR), inflation rate (IFR), and exchange rate (EXR) used as the independent variables. Secondary data for the variables was sourced from Central Bank of Nigeria (CBN) Statistical Bulletins covering the period 1985 to 2017. The study employed multiple regression technique, Augmented Dickey-Fuller unit root test, Johansen co-integration test and Error Correction Model (ECM) based on the E-views 9.0 software as methods of data analysis. The analysis of data revealed that a long-run equilibrium and short-run dynamic relationships existed between the selected macroeconomic variables and stock market performance in the Nigerian Stock Exchange. Overall, the empirical results showed that all the independent variables had significant influence on stock market performance. The impact of the individual macroeconomic variables indicated that broad money supply and exchange rate had significant positive effect on all share-index, while interest rate and inflation rate exhibited an inverse relationship with all-share index. Based on the findings, the study recommended that the monetary authorities should put in place sound monetary policies that would bring about positive developments in the stock market.
Keywords: All share index, Exchange Rates, Inflation, Interest, Money Supply, Stock Market
The Impact of Capital Market Growth on Nigerian Economy (Published)
This study examined the impact of capital market growth on Nigerian economy between 2000 and 2013. Data were collected from Security Exchange Commission reports, Nigerian Stock Exchange Review Reports, Central Bank of Nigeria Statistical Bulletin respectively and ordinary least square method of regression was used with aid of SPSS version 16 software packages to analyze the data. Gross Domestic Product (GDP) was used as measure for economic growth while the capital market development are represented with Market Capitalization (MCAP), Numbers of Deals, All-Share Index (ALSI) and Total Value of Transaction (TVT).The result of the study reveals a strong correlation between economic growth and the independent variables. This is clearly shown in the very high R, R2, and adjusted R2 of 0.951, 90.4% and 86.1% respectively. With the exception of All Share Index, Total Value of Transaction and Numbers of Deals do not have significant impact on economic growth of Nigeria within the period of study. On the whole, 90.4% variation in economic growth in Nigeria is explained by the model. The long run relationship showed that only market capitalization impact significantly on the GDP. In the same manner the short run error correction model still indicates that market capitalization impacts positively on the economy. The study therefore recommends the pursuit of policies that would improve the depth and breadth of the Nigerian capital market so as to engender a rapid development of the market that would result in the economic growth and development of the economy.
Keywords: All share index, GDP, MCAP, Value of Transaction Capital Market
Evaluation of the Contribution of Nigerian Stock Market on Economic Growth; Regression Approach (Published)
The paper evaluates the contribution of Nigerian Stock Market on Economic Growth. In order to achieve this, regression analysis and ordinary least square technique was employed. The result indicates a positive relationship between economic growth, all share index and market capitalization with a 99.1% R-square value and a 99% adjusted R-squared value implying that economic growth in Nigeria is adequately explained by the developed model. The result of this study which established positive links between the capital market and economic growth suggests that policies geared towards rapid development of the capital market should be initiated.
Keywords: All share index, Gross Domestic Product, Market Capitalization, Nigerian Stock Market, Regression Analysis, Value of Transaction, economic growth
