SECURITY PRICE BEHAVIOUR IN THE NIGERIAN STOCK EXCHANGE: AN EMPIRICAL STUDY
SECURITY PRICE BEHAVIOUR IN THE NIGERIAN STOCK EXCHANGE: AN EMPIRICAL STUDY
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Date
1999-06
Authors
ALOYSIUS, Vutuvu
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Abstract
The level of savings mobilization and resource allocation tends to have strong
correlation with the level of economic development. The allocativc function can often be
critical in determining the overall growth of the economy. Thus, efficient capital markets
are needed to facilitate fund transfers from surplus spending units and chanelling them to
deficit economic units for productive investments. Capital market efficiency means that
information is widely and cheaply available to investors and that security prices reflect all
available information about that security. Thus, this research studied the behaviour of
security prices as a means of determining the level of efficiency or otherwise of the
Nigerian Stock Exchange, It also tried to determine the more predominating factor
causing this stock price movement between dividends per share and earnings declared.
To achieve these, statistical methods were employed for the study that covered the period
1994 to 1997 when there was great activity in the market.
The findings are that the market is not efficient. Paucity of securities, insider
dealings, shallow depth and breadth, buy-hold syndrome in the market, were some of the
causes identified for the inefficiency. It was also found that earnings are better motivators
than dividend payment in relation to investment selection. That trading volume is
important to investment decision only to the extent that it serves as confidence indicator
of the company's performance. It was suggested that, the adoption of sound macroeconomic
policies such as realistic interest rate, and the efficient deregulation of the
economy among other measures, will stimulate savings and investment climate in the
economy, hence growth of the market leading to its efficiency.
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Description
A THESIS PRESENTED TO THE POST-GRADUATE SCHOOL,
AHMADU BELLO UNIVERSITY, ZARIA IN PARTIAL FULFILMENT
OF THE REQUIREMENTS FOR THE AWARD OF THE MASTER OF
SCIENCE (ACCOUNTING AND FINANCE) DEGREE
Keywords
SECURITY PRICE BEHAVIOUR,, NIGERIAN STOCK EXCHANGE,, EMPIRICAL STUDY