Tag Archives: Market Capitalization

Causal Relationship between Financial Structure and Economic Growth in Contemporary African Economy: A Case Study of Nigeria from 1990-2018 (Published)

This study examined financial structure and economic growth of contemporary African economies; evidence from Nigeria. The specific objectives of this study are to investigate the effect of financial structure in bank credit to the private sector ratio (BC), market capitalization ratio (MC), liquid liability ratio (LLR), turnover ratio (TR) and value of traded share (VTS) on economic growth variable in Gross Domestic Product (GDP). The study was anchored on bank based and market-based theory. The study used secondary data obtained from World Bank Data Atlas and subjected them to Granger Causality technique to test the interaction between independent variables and the dependent variable at the 5% level of significance. The findings show that financial structure in BC, MC, LLR, TR and VTS had no significant effect on GDP in the contemporary African economies. The result further discovered that there was absence of long run relationship in the study. Thus, the study concludes that financial structure does not have significant effect on economic growth in the contemporary African economies. Hence, the study recommends that financial structure should strengthen and enhance availability of money supply to key sector of the economy thereby improving economic growth by ensuring financial deepening within the economies and providing viable economic environment for financial enhancement to boost investment activities within the Nigerian economy.

Keywords: Bank credit, GDP, Market Capitalization, economic growth, financial structure

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

An Assessment of the Factors That Affect the Financial Performance of the Cross-Listed Companies in the Rwanda Stock Exchange (Published)

This research study entitled An Assessment of the Factors that Affect the Financial Performance of the Cross-Listed Companies in the Rwanda Stock Exchange aimed at assessing the factors that affect the financial performance of the cross listed companies on the RSE. As a guidance, the research examined the relationship between the level of awareness of the market by the public and the financial performance of cross-listed companies in RSE, assessed how the regulation framework affect the financial performance of the cross-listed companies on the RSE feature, and finally determined how technology affects the performance of cross-listed companies. The companies under consideration were the primary stakeholder of the RSE totalling to 14 firms which included Capital Market Authority, Rwanda Stock Exchange, the 9 brokerage firms and the 3 cross listed firms in the RSE employing 97 workers. Through a descriptive survey design, a sample size of 67 participants were selected from the 97 workers and 100 other informants identified purposively and their responses to various data collection tools particularly questionnaires and interview guides captured for analysis. The data were analysed through Hermeneutics, Thematic analysis, and Multiple Regression techniques to answer the questions that the research ventured out to investigate. The result of the analysis showed that there was a negative correlation between awareness and financial performance of the firms, regulation framework was positive and significant with r (67) = .684, P = .037, while technology correlated with r = .506, p = .094. Market capitalization of the domestic companies was larger than that of cross-listed, and return on equity of the domestic firms was better than for the cross-listed companies. Generally the cross-listed companies did not perform any better than the domestic firms though overall the public awareness, technology and regulation framework positively correlated with financial performance of the cross-listed firms. The recommendation is that more awareness strategy needed to be devised so as to increase public awareness of investors and cross-listing companies need to be motivated by other factors other than making profits when choosing.

Keywords: Capital market, Financial Performance, Market Capitalization, Rwanda, profit, stock exchange

Determinant of Price Earning Multiple in Sir Lankan Listed Companies (Published)

This study involves a determinant of the price earning multiple of listed companies in Sri Lanka. The sample of the study is composed of 30 companies listed on the Colombo Stock Exchange from 2007-2011. The results reported in the empirical study for sample companies show that the ROE has a negative impact on P/E multiple and the dividend payout has a positive impact on P/E multiple amongst listed companies in Sri Lanka.Hence it is not advisable to use the market capitalization variable to determinant the P/E multiple in Sri Lanka.

Keywords: Market Capitalization, Payout Ratio, Price earning multiple