EFFECT OF MACROECONOMIC DETERMINANT OF CAPITAL MARKET PERFORMANCES IN NIGERIA
CHAPTER ONE
Introduction
1.1 Background to the study
The capital market in any country is one of the major pillars of long term economic growth and development. The market serves a broad of clientele including dierent level of government, corporate bodies and individuals within and outside the country. For quite some time now, the capital markets generally, are believed to be heart beat of
the economy given their ability to respond almost instantaneously to fundamental
changes in the economy (Maku & Atanda, 2010).
The capital market is known as the equity or stock market and is one of the important areas of a market economy as it provides access to capital to companies, ownership in the company for primary investors and the potentials of gains based on the rms future performance for secondary investors (Osoro,2013). Returns from such equity investments subject to vary owing to the movement of share prices, which depends on various factors which could be internal or rm specic such as earning per share, dividends and book value or external factors such as interest rate, GDP, Ination, government regulations and foreign exchange rate (Omodero & Ekwe,2016).Capital market performance is the indicator of stock market as whole. It gives signal to the investors about their future moves. The movement in the price of the stock and the indexes gives the idea of the near future trend of the stock or sector as a whole (Maku & Atanda, 2010). As nancial domain is the most important one of an economy, so the capital market performance works as an indicator of the overall health of the economy.
Capital market indexes typically gives the overall performance of the market, indexes reect the performance of the economy (Barako, 2007). Stock price is used as a benchmark or an indicator of the performance of a stock and if the price of a particular stock is rising, then it is perceived that it has certain positive
news or signals. But if it decreases then there must be some news regarding its performance, which is generating negative signals to the market (Osoro, 2013). Hence, the stock price movement and index movement show the general economic trend of a country. Capital market performance aected by a wide array of factors as economic, political, international and company specic issues, and it is imperative for the nancial manager of the rms to pay due attention to the factors that inuence stock prices as this could help them enhance rm value in the market (Garcia & Liu, 1999). Brinson, Singer and Beebower (1991) dened macroeconomic variables as those that are pertinent to a broad economy at the regional or national level and aect a large population rather than a few selected individuals. The variables indentied as having major inuence include ination, gross domestic product (GDP), currency exchange rates, interest rates, legal and regulatory environment and risk. These variables are closely observed by business, government and consumer and they have an impact on the capital market performance. Kwon and Shin (1999) observe that an economy aect the performance of its capital market and by extension the most influential macroeconomic variable are GDP, exchange rate, interest rate, ination and market risk.
Sharma and Singh (2011) found that many capital market performance, which normally carry out their investment over a long duration of time and usually they have an expectation that macroeconomic variable will remain stable and favorable to their operation over the entire duration of their investment. The movement in stock prices is directly related to some fundamentals like performance of the rm, movement in key macroeconomic variable and government actions (Karitie, 2010)
The linking of macroeconomic variable and capital market is the aggregate capital market framework, where a change in given underlying systematic risk factor influencing future returns. Most of the empirical studies, linking the state of macroeconomy to capital market returns or performance, are characterized by modeling a
short run relationship between macroeconomic variables and stock prices, assuming trend stationarity (Andrew & Peter, 2007). In assessing the determinants of capital market performance, this paper will mainly consider exchange rate, inaction rate, money supply and real gross domestic product (real GDP).
1.2 Statement Of The Problem
The performance of the capital market in any country is the indicator of general economic performance and is an integral part of the economy of any country. With the introduction of free and open economic policies and advanced technology. Investors are nding easy access to capital market. The fact that capital market indices have become an indicator of the health of the economy of a country indicates the importance of capital market. The increasing importance of the capital market has motivated the formulation of many theories to describe the working of the capital market (Gupta, Chavaller and Sayeki, 2008).
Garcia and Liu (1999) established that macroeconomic volatility does not aect capital market performance. While Maku and Atanda (2010) revealed that the stock market performance in Nigeria is mainly acted by macroeconomic forces in the long run in Nigeria.
Ting, Feng, Weng, and Lee (2012) established that Kuala Lumpur composite index is consistently inuence by interest rate, money supply and consumer price index in short run and long run in Malaysia. Mahwish (2013) established there is negative relationship between real interest rate and stock market performance in Pakistan. Jahur, Quadir and Khan (2014) established microeconomic variable such as consumer price index, interest rate have signicant impact on the stock market performance in Banglade. It is notable that there is lack of consensus of the eect of macroeconomic factors, on capital market performance. Therefore, this study will examine the macro-economic determinant of capital market performance in Nigeria.
1.3 Research Questions
- What are the relationship between the capital market and macro-economic variable in Nigeria?
- What are the impact of macroeconomic variable on the Nigerian capital market performance?
1.4 Research Objectives
The general objective of this study is to examine the eect of the selected macroeconomic determinant of capital market performances in Nigeria.
The specic objectives of the study are:
- Examine the relationship between the capital market and micro-economic variable in Nigeria?
- Investigate the impact of macroeconomic variable on the Nigerian capital market performance?
1.5 Research Hypotheses
The following hypotheses were tested for the purpose of the study;
- Ho1 There is no signicant relationship between the capital market and macroeconomic variables in Nigeria
- Ho2 There is no signicant impact of macroeconomic variables on Nigerian Capital Market performance.
1.6 Significance of the study
The Nigerian Securities and Exchange Commission and Nigerian Stock Exchange (policy maker); the study ndings will be of great benet in formulations and implementation of policies related to share pricing as well as regulating of stock exchange trading. The government will also be informed on how to make policies, rules and regulations regarding trading rule that will help protect investors so as to encourage investment and spur economic growth.
Firms and individual (Investors): The nding will assist them in understanding the factors acting share prices and they will be better informed on how to range their investment options while banks and other financial institution will be investors who seeks ndings to nance share purchases. In addition, scholars and researchers will nd the study useful if they wish to use the nding as a basis for carried and further research on the subject.
1.7 Scope of the study
The research covered an evaluation of macroeconomic determinant of capital market performance in Nigeria. The scope of the study is the Nigerian stock exchange, making use of the capital market performance indicators such as market capitalization. The study covered the period of 1985-2015 and selected macroeconomic variable such
as real GDP, ination rate and money supply in determining capital market performance.
CHAPTER TWO
2.0 Literature Review
2.1 Introduction
The review of relevant literature is the main topic of this chapter. A literature review covers theoretical and methodological contributions to a certain issue in addition to the state of knowledge at the time of writing. It provides information about the state of the art in relation to the subject you are writing about. It examines the body of work on the chosen subject. The literature evaluation in this study comprises the …
Procedure for Downloading the PDF (Docx) Material
Effect of Macroeconomic Determinant of Capital Market Performances in Nigeria can be downloaded by requesting the full set of materials at the project or seminar cost. The document will be sent via Microsoft Word (MS-Word) format via WhatsApp (e-mail) following payment confirmation.
| Seminar Material Cost ₦3,000 | Project Material Cost ₦5,000 |
Request Complete Material
 | Click here to request the Complete Material via WhatsApp including;
|
TABLE OF CONTENTSPRELIMINARY PAGES
- Title page
- Approval page
- Dedication
- Acknowledgement
- Table of Contents
- Abstract
INTRODUCTION
- 1.1 Background …
- ⋮
LITERATURE REVIEW
- 2.1 Introduction
- 2.2 Conceptual Review
- 2.3 Theoretical Framework
- ⋮
- 2.4 Empirical Studies
- 2.5 Research Gaps
- 2.6 Summary of Literature Review
CHAPTER THREE
RESEARCH METHODOLOGY
- 3.1 Introduction
- 3.2 Research Design
- 3.3 Population of Study
- 3.4 Sampling and Sampling Technique
- 3.5 Validation of Research Instrument
- 3.6 Method of Data Collection
- 3.7 Method of Data Analysis
- 3.8 Questionnaire Administration
- 3.9 Ethical Consideration
- 3.10 Statistical Analysis
CHAPTER FOUR
DATA ANALYSIS, RESULT AND DISCUSSION
- 4.1 Introduction
- 4.2 Presentation and Analysis of Data
- 4.3 Re-statement of Research Questions
- 4.4 Test of Hypotheses
- 4.5 Discussion of Findings
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
- 5.1 Introduction
- 5.2 Summary of Findings
- 5.3 Conclusion
- 5.4 Recommendation
- 5.5 Suggestion for Further Study
REFERENCES
APPENDIX A - “QUESTIONNAIRE”
Disclaimer for Complete Material Utilization
The displayed research work titled "Effect of Macroeconomic Determinant of Capital Market Performances in Nigeria" is stated as a research guideline towards accomplishing your assigned project / seminar research work. All the research materials on this website are ONLY for research purposes and should be used as a guideline in developing your research work. For no reason should you copy word for word as projectlist.com.ng will not be liable for any who copied the material. By ordering the complete research guideline, it signifies that you've accepted our terms of service.
PRELIMINARY PAGES
- Title page
- Approval page
- Dedication
- Acknowledgement
- Table of Contents
- Abstract
INTRODUCTION
- 1.1 Background …
- ⋮
LITERATURE REVIEW
- 2.1 Introduction
- 2.2 Conceptual Review
- 2.3 Theoretical Framework
- ⋮
- 2.4 Empirical Studies
- 2.5 Research Gaps
- 2.6 Summary of Literature Review
CHAPTER THREE
RESEARCH METHODOLOGY
- 3.1 Introduction
- 3.2 Research Design
- 3.3 Population of Study
- 3.4 Sampling and Sampling Technique
- 3.5 Validation of Research Instrument
- 3.6 Method of Data Collection
- 3.7 Method of Data Analysis
- 3.8 Questionnaire Administration
- 3.9 Ethical Consideration
- 3.10 Statistical Analysis
CHAPTER FOUR
DATA ANALYSIS, RESULT AND DISCUSSION
- 4.1 Introduction
- 4.2 Presentation and Analysis of Data
- 4.3 Re-statement of Research Questions
- 4.4 Test of Hypotheses
- 4.5 Discussion of Findings
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
- 5.1 Introduction
- 5.2 Summary of Findings
- 5.3 Conclusion
- 5.4 Recommendation
- 5.5 Suggestion for Further Study
REFERENCES
APPENDIX A - “QUESTIONNAIRE”
Disclaimer for Complete Material Utilization
The displayed research work titled "Effect of Macroeconomic Determinant of Capital Market Performances in Nigeria" is stated as a research guideline towards accomplishing your assigned project / seminar research work. All the research materials on this website are ONLY for research purposes and should be used as a guideline in developing your research work. For no reason should you copy word for word as projectlist.com.ng will not be liable for any who copied the material. By ordering the complete research guideline, it signifies that you've accepted our terms of service.
Frequently Asked Questions (FAQ)
Can the material for “Design and Implementation of Computerized SMS Portal” be used as a guide for Computer Science (CS) Project?
Yes it can be used — The project on the topic “design and implementation of computerized SMS portal” aims at making the reader to understand the concept of SMS portal and portal in general. When portal is mentioned, it is very wide, but this paper is intended to concentrate mainly on the SMS portal. This research work has enlighten more on the concept of portal systems, personal portals, cultural portals, co-operate portals, tenders portals, hosted web portals, search portals, stock portals, domain-specific portals, government web portals, and desirable features of portals. Both existing and new systems are carefully analyzed and more advantage of the new one over the old indicate that the problems encountered in the existing system such as untimely delivery of messages, unsecured information …
Can the material for “Financial Statement as a Tool for Evaluating Performance of Companies Investment Decision” be used as a guide for Accountancy / Accounting Project?
Yes it can be used — The study examined financial statement as a tool for evaluating performance of companies’ investment decision. Data for the study were obtained from the primary source. Hypotheses were formulated and tested using chi-square. Based on the analysis the researcher found out that decision to invest or not is mostly based on the amount of reserves with a company at a particular point in time. From the analysis, the researcher discovered that ratio analysis is an effective instrument that aids in making investment decision when it attracted 76% in the responses to the questionnaire. It was equally discovered that the most important reason why investment decision is required is actually for goal actualization. This is because from the questionnaire, the researcher recorded …
Is the topic “Practical Approaches for Solving Lost Circulation Problems While Drilling” recommended for Petroleum Engineering Project?
Yes it is highly recommended — Lost circulation is a common drilling problem especially in highly permeable formations, depleted reservoirs, and fractured or cavernous formations. The study was carried out to examine the Practical Approaches for Solving Lost Circulation Problems While Drilling. In achieving this aim, the following specific objectives were laid out to evaluate the gelling characteristics of the system and test procedure for plugging capability and provide the successes and the failures of the methods presented above in field applications. Investigation revealed that lost circulation is a common drilling problem especially in highly permeable formations, depleted reservoirs, and fractured or cavernous formations. The range of lost circulation problems begin in the shallow, unconsolidated formations and extend into the well-consolidated formations that are fractured by …
Can the material for “Effect of Communication Barriers in Achieving Organizational Goals in Niger Gas” be used as a guide for Office Technology and Management (OTM) Project?
Yes it can be used — If communication is adequate in organizations, there will be proper coordination between the staff and the management and hence achieving the organizational goals on the other hand, if communication is on adequate, it hampers the smooth running of the affairs of the business and general a lot of problems. This study investigates the effect of communication barriers in achieving organizational goal in Niger gas. It is a case study conducted in Ememe Enugu, the purpose of the study was to identify the negative aspects that stress cause and the effect in the organization. Books relating to the topic were consulted to give theoretical frame work to the study. The population and the sample size of the study were 75. This …
Can the material for “Design and Fabrication of Twin Panel Metal Door” be used as a guide for Mechatronics Engineering Project?
Yes it can be used — The study was conducted to design and fabricate the of twin panel metal door. In achieving this aim, the following specific objectives were laid out to allow large objects to pass through the door at the same time by opening the two panels and prepare students for future task as an engineer or technologist. Privacy and security are major essential human needs in various houses, offices etc. ability to afford quality door and high long life span at an affordable price to an average Nigerian has been a problem. This project is aimed at fabrication of a double panel door which is capable of giving maximum security to life and properties. The locally available material (mild steel) of different shapes, …
Can the material for “The Effects of Inventory Management in Manufacturing Company” be used as a guide for Accountancy / Accounting Project?
Yes it can be used — The technique of inventory control is indispensable going by their impact in contributing, promoting and ensuring efficiency and effectiveness in any organization. In actual practice the vast majority of manufacturing companies suffer excessive inventories than are necessary. Therefore, inventory control process is much more complex than the uninitiated understand. In fact, inventory control is perceived as little more than a clerical function. This has resulted into lots of material shortages, high costs and loss of profit. This study provides a basis for implementing inventory control policies by service companies, professional managers, especially manufacturers. The aim of these research works is to critically assess the impact inventory control has on the profits of manufacturing companies. Relevant literature on inventory management and control …
Can the material for “The Impact of Exchange Rate Instability on Investment in Nigeria” be used as a guide for Economics Project?
Yes it can be used — This research work is centered on the effects of exchange rate instability on investment in Nigeria. With special emphasis on the purchasing power of average Nigerian and the level of international trade transaction. Without exchange rate, the exchange of goods and services among trading partners will be focused with a lot of problems, which may virtually narrow it down to trade by barter. This exchange also is used to determine the level of output growth and investment of the country. Hence, the rate at which exchange rate fluctuate calls for a lot of attention. However, with the already existing exchange rate policies, a constant exchange rate has not been attained. The rate by which exchange rate fluctuates brings about uncertainty …
Is the topic “Impact of Collective Bargaining Process on the Renumeration of Workers” recommended for Industrial Relations and Personnel Management (IRPM) Project?
Yes it is highly recommended — The study focuses on the impact of collective bargaining process on the remuneration of workers in Intercontinental Distillers Limited. In other to establish this fact remuneration indicator (wages) and the collective bargaining indicators (bargaining power and length of union membership) were identified. Other collective bargaining indicators like workers motivation and productivity were also identified. Frequency distribution Tables, Spearman Rank order correlation was used to analyze the data so obtained from the administered questionnaires while the t-score statistical method was used to test the relevant hypotheses. Collective bargaining process tend to form the basis for wage determination in IDL (intercontinental Distillers Limited) workers unions and based on this it is recommended that good negotiation skills influenced by a well-informed trade union would …
Can the material for “Impact of Company Income Tax on Economic Growth in Nigeria” be used as a guide for Economics Project?
Yes it can be used — This study examined the impact of companies’ income taxon economic growth (proxy by gross domestic product) in Nigeria. Secondary time series panel data was collected for the period 2005 to 2014 from the Statistical Bulletin of the Central Bank of Nigeria (CBN). The study employed Ordinary Least Squares (OLS) technique based on the computer software Windows SPSS 20 version for the analysis of data, where gross Domestic product (GDP), the dependent variable and proxy for economic growth, was regressed as a function of company income tax (CIT) and value-added tax (VAT), the independent variables. The results of the analysis showed that both company income tax and value-added tax have significantly positive impact on economic growth. Based on the findings, the study …
Can this topic “Investigation Into the Effectiveness of Total Quality Management (TQM) in the Nigerian Construction Industry” be used for Quantity Surveying (QS) Project?
Yes it can be utilized for research — The complex nature of the construction project and the unstable nature of Nigerian economy result in cost escalation of construction materials and equipments and untimely completion of project make it necessary to employ the use of project management practices Nigeria. Investigations were carried out through administration of questionnaire and data were collected from professionals firms, such as quantity surveyor, architects and engineers. The statistical tools used in analyzing the data include tables and simple percentages. The findings obtained after analysis of the data from the questionnaire, shows that there is a standard practice of project management in Nigeria. Problems such as clients not stating their requirements to the project manager, late appointment of manager and denial of project manager proper authority …