The Impact of Financial Liberalization on Liquidity and Efficiency of the Nigerian Stock Market
The Impact of Financial Liberalization on Liquidity and Efficiency of the Nigerian Stock Market
No Thumbnail Available
Date
2009-04
Authors
YUSUF, HALIRU
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
The Nigerian stock market has been liberalized in 1995 in order to enhance the
liquidity and efficiency of the market. The view of liberalizing the market is in
conformity with the liberalists who argue that financial liberalization eradicates
condition of financial repression in the financial sector and in turn makes the sector
stand a better chance to grow and develop to appreciable levels than otherwise. The
objective of this study, therefore, is to find out whether or not financial liberalization
has any significant impact on the liquidity and efficiency of the market in sustaining
economic growth. Data were collected through secondary sources from the Securities
and Exchange Commision’s data bank and annual financial statements and the
Nigerian Stock Exchange annual financial statements among others. Using paired ttest
to analyse the data for twenty years; from 1986-2005, the study found that
financial liberalization has significant positive impact on the liquidity and efficiency
of the Nigerian stock market. The study, among other things, recommended that the
liquidity, and by extension efficiency of the Nigerian stock market should be
enhanced through encouragement of the effective participation of financial institutions
in the market. Furthermore, the study recommended that the participating institutions,
like Banks and individual investors, in the market should comply with basic
macroeconomic policies, like fiscal policy and monetary policy, in order to make the
market robust and performance driven.
Description
A THESIS SUBMITTED TO THE POSTGRADUATE SCHOOL,
AHMADU BELLO UNIVERSITY, ZARIA
NIGERIA
Keywords
Impact, Financial, Liberalization, Liberalization, Efficiency, Nigerian, Stock, Market