An Empirical Investigation On Effect Of Macro Economic Factor On Stock Market Performance In Nigeria

ABSTRACT

The study empirically investigated the effect of macroeconomic factors on stock market performance using time series data from 1995 to 2017. The macroeconomic factors considered were real gross domestic product, money supply, exchange rate and interest rate, while stock market performance was measured by all share index. Multiple regression analysis was carried out on the data collected. The results showed that real gross domestic product and money supply were positive and significant in affecting stock market performance, while interest rate and exchange rate were insignificant. It was recommended among other things Government should ensure that the economy of Nigeria is well diversified by encouraging investments in other key economic sectors so as to boost stock market performance.

TABLE OF CONTENTS

Title Page ﾿ i

Declaration ﾿ ii

Certification ﾿ iii

Dedication ﾿ iv

Acknowledgement ﾿ v

Table of Contents ﾿ vi

Abstract ﾿ viii

CHAPTER ONE

1.0 Introduction ﾿ 1

1.1 ﾿ Background to the Study ﾿ 1

1.2 ﾿ Statement of the Problem ﾿ 2

1.3 ﾿ Objectives of the Study ﾿ 4

1.4 ﾿ Research Questions ﾿ 4

1.5 ﾿ Research Hypotheses ﾿ 4

1.6 Significance of the Study ﾿ 5

1.7 Scope of the Study ﾿ 5

CHAPTER TWO

2.0 Review of Related Literature ﾿ 6

2.1 Conceptual Literature ﾿ 6

2.1.1 Stock Market ﾿ 6

2.1.2 Micro economic Factors ﾿ 7

2.1.2.1 Inflation ﾿ 7

2.1.2.2 Exchange Rate ﾿ 8

2.1.2.3 Money Supply ﾿ 8

2.2.2.4 Real Gross Domestic Product ﾿ 9

2.1.3 Micro economics Determinants of Stock Market performance ﾿ 9

2.2 Theoretical Framework ﾿ 11

2.2.1 The Purchasing Power Parity (PPP) ﾿ 14

2.3 Empirical Literature ﾿           15

CHAPTER THREE

3.0 Research Methodology ﾿ 21

3.1 Research Design ﾿ 21

3.2 Model Specification ﾿ 21

3.2.1 Description of Research Variables ﾿ 22

3.3 Technique of data analysis ﾿ 23

3.3.1 Statistical Criteria ﾿ 23

3.4 Sources of Data Collection ﾿ 23

3.4.1 Secondary Data ﾿ 24

CHAPTER FOUR

4.0 Data Presentation, Data Analysis and Discussion of Findings ﾿ 25

4.1 Data Presentation ﾿ 25

4.1.1 Descriptive Analysis ﾿ 26

4.2 Analysis and Discussion of findings ﾿ 27

4.2.1 Regression Analysis ﾿ 27

4.2.2 Testing hypotheses ﾿ 28

CHAPTER FIVE

5.0 Summary of findings, conclusion and recommendations ﾿ 30

5.1 Summary of Findings ﾿ 30

5.2 Conclusion ﾿ 30

5.3 Recommendations ﾿ 30

Reference ﾿

Appendix ﾿