Premium Essay

Predictability of Stock Price on Nigeria Stock Exchange

In: Business and Management

Submitted By adebayoadisa
Words 11803
Pages 48



The performance of an economy is dependent largely on the efficient performance of its financial markets, since they facilitate the financing of productive activity and hence national output and economic growth. In this research report, the key roles and function of the financial markets are highlighted with the thrust of the discussion on the core issue of how the market works; directly and indirectly.
One of the most important factors for rapid economic development is the effective mobilization and allocation of scarce resources within an economy. These resources can be real or financial, but they are scarce and command a price. The establishment of effective and efficient channel for the mobilization and allocation of scarce financial resources is therefore essential.

The financial market, comprising of the money and capital markets, occupies an important place in most economies of the world. The primary function of a financial market is to enable funds to be sufficiently allocated from the surplus units of the economy to the deficit units for productive investment. The greater the transmission efficiency is, the higher the rate of growth of the economy (Olowe, 1997).

The money market trades only in securities or debt instruments maturing in less than twelve months, while in the capital market, longer term debts as well as equity instruments are traded. The complementarity between money market and capital market is necessary for a balanced development of the financial system. (NSE Fact Book 2010)
The money market is a market for the mobilization, allocation and trading in short-term funds. It is, thus, a market for trading in short-term financial instruments. The major participants in the money market include individuals, companies, banks, discount houses and government.


Similar Documents

Premium Essay

Mr. Whyte

...International Journal of Business and Management December, 2009 Appraisal of Capital Market Efficiency on Economic Growth in Nigeria Sunday O. E. Ewah, Atim E. Esang & Jude U. Bassey Faculty of Management Sciences, Cross River University of Technology Ogoja Campus, Nigeria Tel: 80-5901-4300 Abstract E-mail: The paper is an appraisal of the impact of capital market efficiency on economic growth in Nigeria, using time series data on market capitalization, money supply, interest rate, total market transaction and government development stock that ranges between 1961 to 2004. The model specification for the analysis of data is multiple regression and ordinary lest squares estimation techniques. The result of the study shows that the capital market in Nigeria has the potentials of growth inducing, but it has not contributed meaningfully to the economic growth of Nigeria. This is as a result of low market capitalization, low absorptive capitalization, illiquidity, misappropriation of funds among others. The empirical test indicates that, these variables satisfied the economic apriori and are statistically significant except total transactions and money. Thus it was concluded and recommended that, the capital market remain one of the mainstream in every economy that has the power to influence economic growth, hence the organize private sector is encourage to invest in it. This will enable the capital market improve its illiquidity status for economic...

Words: 6124 - Pages: 25

Premium Essay

Weak Form Efficiency Test of Dse

...Weak- Form Market Efficiency of Dhaka Stock Exchange (DSE), Bangladesh ABU TAHER MOLLIK Economics & Finance, Regional School of Business, Faculty of Law and Management, La-Trobe University, Bendigo, VIC 3550, Australia.; M KHOKAN BEPARI PhD Student School of Commerce and Marketing Faculty of Arts, Business, Informatics and Education Central Queensland University, Australia Email:; Phone:+610402917968 Weak Form Market Efficiency of Dhaka Stock Exchange (DSE), Bangladesh Abstract This paper examines the weak-form efficiency in Dhaka Stock Exchange (DSE) of Bangladesh adjusting for thin trading problem. Both non-parametric tests and parametric tests are used. The data sets consist of daily DSE General Index (DSE-GEN) and DSE 20 Index for the period ranging from January 1, 2002 to December 31, 2007. The results of the study reveal that DSE return series are not normally distributed. Both the return series are stationary and do not follow a random walk. Overall, the study rejects the weak form efficiency of DSE. Key words: Efficient Market Hypothesis; Dhaka Stock Exchange; Random Walk Model; Weak Form of Efficiency; Return autocorrelation. JEL classification: G14, N25, G 34 Weak Form Market Efficiency of Dhaka Stock Exchange (DSE), Bangladesh 1. Introduction The theory of efficient market hypothesis (EMH) proposed by Fama (1965) was a......

Words: 7750 - Pages: 31

Premium Essay

Economic Growth

...Africa’s performance and prospects Africa’s macroeconomic prospects Africa’s gross domestic product (GDP) growth is expected to strengthen to 4.5% in 2015 and 5% in 2016 after subdued expansion in 2013 (3.5%) and 2014 (3.9%). The 2014 growth was about one percentage point lower than predicted in last year’s African Economic Outlook, as the global economy remained weaker and some African countries saw severe domestic problems of various natures. But the world economy is improving and if the AEO 2015 predictions are right, Africa will soon be closing in on the impressive growth levels seen before the 2008/09 global economic crisis. Figure 1. Africa’s economic growth, 2002-16 0 1 2 3 4 5 6 7 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014(e) 2015(p) 2016(p) Africa Africa excluding Libya Growth rate (%) Note: (e) estimates; (p) projections. Source: Statistics Department, African Development Bank. West Africa achieved relatively high growth of 6% in 2014 despite its battle with the Ebola virus (Box 1). Nigeria’s growth of 6.3% came mainly from non-oil sectors showing that the economy is diversifying. But Southern Africa’s growth fell below 3% as the key South African economy only grew by 1.5%. Overview ii African Economic Outlook © AfDB, OECD, UNDP 2015 iii Table 1. Africa’s growth by region, 2013-16 (Real GDP growth in percent) 2013 2014 (e) 2015 (p) 2016 (p) Africa 3.5 3.9 4.5 5.0 Central Africa 4.1 5.6 5.5 5.8 East Africa 4.7 7.1 5.6 6.7 North Africa 1.6 1.7......

Words: 2461 - Pages: 10

Premium Essay

The Effect of Merger and Acqusition on Organisational Performance.

...organisation is graded on various performance parameters to determine how well the company is doing when compared with its set goals and the performance of other companies. The following are areas of expectation of good performance. o The organisation’s vision objective and associated plan – how much of this is seen in reality of the organ’s operation / result. o The organisation’s structure, values and culture – which are what, distinguish one organisation from the other even though they are in same market/industry. o The sector and market in which the organisation operates and the organisation’s share of the market. o The organisation’s competitive strength this being able to take more share of the market and determine price movement. o The financial strength and investment potential of the organ to venture into new areas/ development of existing market and pelt. Many organisations have had problems in driving the above fully to the advantage of their organisation hence have consistently not improve in their performance when assessed by the stakeholders in the organisation. The Annual General Meeting of some companies have become battle grounds between the shareholders and the management managing the organisation, Some organisation’s Turnover is so high as unsatisfied key professional employees among others, have left the organisation for more successful companies with better staff welfare, Investors have withdrawn their investment and move......

Words: 15959 - Pages: 64

Premium Essay

Critical Analysis

...Jessica Yarington Critical Analysis: Bribery and its Effect on Business Practices BMAL 560-D06 Dr. Henry Critical Analysis Critical Analysis Topic: Bribery and it’s Effect on Business Practices PRINCIPLE: * Bribery refers to “the offering, giving, soliciting, or receiving of any item of value as a means of influencing the actions of an individual holding a public or legal duty” (Bribery, 2015). * Economist say that bribery negatively impacts economic growth because it encourages rent seeking behavior (Bribery, 2015). * Rent seeking behavior refers to an “individual’s or corporation’s attempt to illicitly influence the open market in order to provide that individual or corporation with a disproportionate amount of wealth” (Bribery, 2015). * The United Nations reported that corruption costs governments about $1.6 trillion dollars every year. * Economists estimated, based on a poll done in 86 countries, that 1 in every 4 businesspersons worldwide, paid a bribe in the past year (Lawrence & Weber, 2014). * Legislation has been established in an attempt to combat bribery. * The US Foreign Corrupt Practices Act (FCPA) is considered to have the widest jurisdictional reach, being aggressively enforced, both nationally and worldwide (Ernst & Young, 2013). PRACTICE: * Bribery is found in almost all sectors of the global market (Lawrence & Weber, 2014). * An analysis of Transparency International’s......

Words: 2795 - Pages: 12

Premium Essay


...THE ROLE OF COMMERCIAL BANK FINANCING ON THE GROWTH OF THE MANUFACTURING SECTOR IN NIGERIA A RESEARCH PROJECT SUBMITTED BY ETIM KATHRINE ETOK: 08/BAF-5/140 DEPARTMENT OF BANKING AND FINANCE: FACULTY OF MANAGEMENT SCIENCES UNIVERSITY OF CALABAR: TO DEPARTMENT OF BANKING AND FINANCE FACULTY OF MANAGEMENT SCIENCE UNIVERSITY OF CALABAR IN PARTIAL FULFILMENT OF THE COURSE REQUIREMENT FOR THE AWARD OF A BACHELOR OF SCIENCE DEGREE IN BANKING AND FINANCE JUNE, 2014. ACKNOWLEDGMENT My profound gratitude goes to God Almighty, for his guidance, protection, love and strength etc. that has seen me throughout these five years of study. Special thanks also go to my parents, Elder and Mrs. NyongEtok for allowing themselves to be used by God as a foundational stone to my academic pursuit. I am also grateful to my siblings Master, EkpenyongEtokEtim, Miss, AritEtokEtim, Miss Victoria EtokEtim and little Daddy boy, and my friend EgbeAsikong. Special thanks to my supervisor Hon. BasseyIbor, who took pains to go through my work and provided required guidance and insightful comments. Finally I thank all those whose names are not mentioned here but who contributed in one way or the other in making this work successful. May God bless you all. ABSTRACT This examined the role of commercial bank financing on the growth of the manufacturing sector in Nigeria. Time series data covering the period 1990 – 2012 was used. Four research questions guided the study and...

Words: 8310 - Pages: 34

Premium Essay

South Africa

...UKESSAYS * Skip to content   * United Kingdom * My Account   * 0115 966 7955 ------------------------------------------------- Top of Form Bottom of Form * UK Essays * Services * Instant Price * Order Now * Essays * Dissertations * Guarantees * Contact * ECONOMICS The economics essay below has been submitted to us by a student in order to help you with your studies. ------------------------------------------------- Top of Form Bottom of Form  Back to Subject Index 1. UKEssays 2. Essays 3. Economics 4. Analysis Of The Emerging Country South Africa Economics Essay  Print  Reference This  Reddit This Tweet Analysis Of The Emerging Country South Africa Economics Essay In the following pages we will analyze the place of South Africa in International Trade. In order to do so we will analyze the background of the country, develop PESTLE analysis, look at the balance of payments as well as trade balance, examine exchange trade policy and growth rate of the economy. In conclusion we will provide forecast for country's development. Today South Africa's trade and industrial policy is moving away from a highly protected, inward looking economy towards an internationally competitive economy, capitalizing on its competitive and comparative advantages. From the period of apartheid, it has made great progress in dismantling its old economic system, which was based on import substitution, high tariffs......

Words: 7363 - Pages: 30

Premium Essay

The Effect of Advertisement on Consumer Behaviour

...CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Advertisement plays a vital role in the marketing of products as it provides a buying power for various product operations by affecting the behavior of consumers. Different media have been used for advertising products such as news papers, magazines and radio. Television however occupies an important place of products due to its extensive spread worldwide. In addition, television plays an important role on changing the consumer behavior and also provides new patterns for consumption. The present context of business organization is situated in increasingly complex, uncertain, and dynamic business environments with multiple realities based on various values, priorities, and requirements. As a result, the challenges demanded by globalization, increased competition, far-reaching socio-cultural and technological developments, and acceleration of changes are bringing about new complexities for organizations. Therefore sustenance of existing customers and attracting new ones in recent times has become a critical factor in business. In fact the seeming growth of many advertising industries is instructive of the fact that, complex and uncertain business environment has lead many organizations to device multifaceted approaches to market their products and services through various techniques of advertisements. Moreover, the essence of being in business by any business......

Words: 14816 - Pages: 60

Premium Essay

Fdi in Kazakhstan

...FOREIGN DIRECT INVESTMENT IN KAZAKHSTAN By Toxeitov Nurlan THESIS Submitted to KDI School of Public Policy and Management in partial fulfillment of the requirements for the degree of MASTER OF PUBLIC POLICY 2004 FOREIGN DIRECT INVESTMENT IN KAZAKHSTAN By Toxeitov Nurlan THESIS Submitted to KDI School of Public Policy and Management in partial fulfillment of the requirements for the degree of MASTER OF PUBLIC POLICY 2004 Professor Tony Michell 2 TABLE OF CONTENTS LIST OF TABLES .......................................................................................................(iii) LIST OF ABBREVIATIONS ......................................................................................(v) INTRODUCTION ........................................................................................................(vi) CHAPTER I. INVESTMENT AND THEIR PLACE IN ECONOMIC SYSTEM §1 §2 Definition of investments and their classification ................................................4 Foreign direct investments as the catalyst of economic growth (on an example of the various countries) ..............................................................7 §3 The international investment activity and her institutes .....................................16 CHAPTER II. INVESTMENT CLIMATE IN KAZAKHSTAN §1 §2 §3 §4 Appeal of economy of Kazakhstan to foreign investors .....................................22 Fixed capital investment in Kazakhstan by region ...................

Words: 20871 - Pages: 84

Premium Essay

China Unbalanced—especially Europe and the United States. By 2005, China’s trade surplus had reached $134 billion, of which $114 billion was with the United States alone. Foreign-invested firms accounted for more than half of this amount. 2 In the U.S., organized labor and various pundits and politicians increasingly blamed China for the loss of as many as 3.5 million manufacturing jobs.3 U.S. Senator Chuck Schumer (D-NY) became a leading voice calling for punitive tariffs if China did not allow its currency, the yuan, to appreciate.4 When China did allow the yuan to appreciate beginning in May 2005, the yuan grew by almost 21% over the next three years, from 8.3 to 6.8 yuan per dollar. However, in October 2008, China once again froze the exchange rate. By then, China's trade surplus with the United States had grown to $258 billion, while its overall current account surplus reached $426 billion. Although political complaints about China’s export-led growth model achieved limited traction, the global financial crisis brought the problem to light. In the fourth quarter of 2008, China’s exports shrank for the first time since 1978. In the first quarter of 2009 they dropped by 25%. Chinese savings stood at 51%, with consumption at 36%. As thousands of processing and assembly plants were forced to close, laying off as many as 20 million workers, it now became absolutely clear to China’s leadership that the growth...

Words: 11533 - Pages: 47

Premium Essay

Alternative Investments

...Figure 3: Development of the working-age population 3 Figure 4: EM vs. US: Consumption levels 4 Figure 5: EM dept. has exceeded EM 5 Figure 6: MSCI World vs. MSCI Emerging Markets 6 Figure 7: CS Hedge Fund Index vs CS EM Hedge Fund Index 7 Figure 8: Country distribution 8 Figure 9: Industry Sectors 9 Figure 10: Equity Share Distribution 9 Figure 11: Perfomanc of the fund 10 Figure 12: EM performance 13 Figure 13: Performance of EM 14 Figure 14: Hedge Fund Strategies in Africa 17 Figure 15: Hedge Fund Strategies in Asian-pacific region 17 Figure 16: Brazil Asset Class Performance 19 Figure 17: Russia and Eastern Europe Focused Hedge Funds 19 Figure 18: African Market Sources 21 Abbreviations FX | Foreign Exchange | GDP | Gross domestic product | MACD | Moving Average...

Words: 4991 - Pages: 20

Free Essay

Multinational Finance

...Chapter Exchange Rate Determination and Forecasting QUESTIONS 1. What is the difference between the ex ante and the ex post real interest rate? 10 Answer: The ex post interest rate corrects the nominal interest rate with the realized or ex post rate of inflation; whereas the ex-ante (or expected) real interest rate corrects the nominal interest rate for expected inflation. As a lender, you care about the real return on your investment, which is the return that measures your increase in purchasing power between two periods of time. If you invest $1, you sacrifice $1 1+i real goods now, where P(t) is the price level. In 1 year, you get back , where i is the P(t) P(t+1) nominal rate of interest. We calculate the real return by dividing the real amount you get back by the real amount that you invest. Thus, if rep is the ex post real rate of return and ex post real interest rate, we have 1 + r ep ⎛ 1+i ⎞ ⎜ P(t+1) ⎟ ⎠ = (1 + i ) = ⎝ ⎛ 1 ⎞ ⎛ P(t+1) ⎞ ⎜ P(t) ⎟ ⎜ P(t) ⎟ ⎝ ⎠ ⎝ ⎠ Notice that the real rate of interest depends on the realization of the rate of inflation because P(t + 1)/P(t) = 1 + π(t + 1), where π(t + 1) is the rate of inflation between time t and t + 1. For simplicity, we drop the time notation and simply write 1 + r ep = If we subtract 1 from each side, we have (1 + i) (1 + π) r ep = which is often approximated as (1 + i) (1 + π) i-π = (1 + π) (1 + π) (1 + π) rep = i – π The approximation involves ignoring the term (1 + π) in the......

Words: 32380 - Pages: 130

Premium Essay

Diamonds as an Alternative Investment

...unaided work.Signature:__________________________________________ | | This work is dedicated to the memory of my beloved grandfather Ivan Smolin. He was a sweet, kind and sensitive man who devoted his life to studying precious stones and metals. He enriched my life with passion to beauty. If God wanted us to bend over he'd put diamonds on the floor Joan Rivers Contents Acknowledgements 3 Executive summary 7 I Introduction 10 Ground for discussion 10 Objectives 10 Methodology 11 II Literature review and hypothesis development 12 Overview 12 Introduction 12 History of diamonds 12 Industry structure 13 DeBeers cartel 15 Diamond valuation 16 Diamond valuation process 16 Determinants of diamond prices 18 Diamond as an investment 19 Types of investment 19 Problems associated with investing in diamonds 20 Benefits associated with investing in diamonds 20 Alternatives to investing in diamonds 23 Hypothesis development 25 III Methodology 26 Data collection 26 Primary research 26 Secondary research 27 Methodology 28 Descriptive statistics 28 Regression analysis 28 Variables 29 Limitations and assumptions 30 IV Analysis and results 32 Interview results 32 Summary statistics 36 Explanation of variables 36 Descriptive statistics 38 Correlation 44 Regression analysis 46 V Conclusions and recommendations 49 References 52 Appendix 56...

Words: 19903 - Pages: 80

Premium Essay

Wipro Analysis

...Producteurs et des Utilisateurs des papiers et cartons Recycles (APUR). Certain statements in this annual report concerning our future growth prospects are forward-looking statements, which involve a number of risks, and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in our earnings, revenue and profits, our ability to generate and manage growth, intense competition in IT services, our ability to maintain our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which we make strategic investments, withdrawal of fiscal governmental incentives,...

Words: 122508 - Pages: 491

Premium Essay


...THE RESILIENCY CHALLENGE: CONSTRUCTING THE AGILE SUPPLY CHAIN FOR HEAVY INDUSTRY June 2014 By Lisa Harrington, President, lharrington group LLC and Associate Director, Supply Chain Management Center, Robert H. Smith School of Business, University of Maryland 2 The resiliency challenge The engineering and manufacturing sector (E&M) is the definition of diversity. The companies that make up the sector manufacture everything from jet engines and drilling rigs to simple fasteners and filters. Broadly speaking, though, E&M firms fall into a number of sub-sectors including Aerospace and Aviation and Industrial and Construction Equipment. The overall sector, like all industries, faces a myriad of issues around volatility, including dealing with natural disasters and supplier disruptions. But these issues aren’t the only ones that keep sector executives up at night. E&M CEOs also worry about how to transform their frequently large and conservative companies into agile enterprises capable of meeting new competition and opportunity head on with faster, leaner and more resilient operations. Global market dynamics are driving the need for transformation. As emerging markets grow and new markets emerge, demand is dispersing geographically. Demand is also fragmenting as a result of increasingly complex requirements from customers both for new product customization and post-sale support and service. Customers want – and expect – more choice......

Words: 5054 - Pages: 21