EFFECT OF MACROECONOMIC DETERMINANT OF CAPITAL MARKET PERFORMANCES IN NIGERIA
chapter One
Foreword
1.1 Research background
The capital market of any country is one of the main pillars of long-term economic growth and development. This market serves a wide range of customers, including various levels of government, business entities and individuals, both domestically and internationally. For quite some time, capital markets have been widely regarded as the heartbeat
An economy with the ability to react almost instantaneously to fundamental factors
Economic change (Maku & Atanda, 2010).
The capital market, also known as the stock market or equity market, is a market because it provides companies with access to capital, primary investors with ownership of the company, and potential profits based on future performance with secondary investors. It is one of the key areas of the economy (Osoro, 2013). Returns from such equity investments may vary due to share price fluctuations that depend on a variety of internal or RM-specific factors, including: B. Earnings per share, dividends, book value or external factors such as interest rates, GDP, government regulations and exchange rates (Omodero & Ekwe, 2016). Capital market performance is an indicator of the stock market as a whole. It gives investors a signal about their future behavior.The movement of stock prices and indices shows how a stock or an entire sector will develop in the near future (Maku & Atanda, 2010). Finance is the most important part of the economy, so the performance of the capital markets serves as an indicator of the health of the economy as a whole.
A capital market index usually shows the overall performance of the market, an index.
Reflects economic performance (Barako, 2007). Stock prices are used as a benchmark or indicator of a stock’s performance, and when the price of a particular stock rises, it is considered to be profitable to some extent
message or signal. However, when it declines, there should be news about its performance and generate a negative signal for the market (Osoro, 2013). Therefore, stock price movements and index movements show the general economic development of the country. Capital market performance is influenced by many factors, including economic, political, international and corporate issues. It is imperative that corporate financial managers pay close attention to the factors that affect stock prices. Market (Garcia & Liu, 1999). Brinson, Singer, and Beebower (1991) define macroeconomic variables as variables that are relevant to the wider economy at the regional or national level, affecting large populations rather than a few selected individuals. I’m here. Variables of primary influence include country, gross domestic product (GDP), and exchange rate.
1.2 Problem Description
The development of a country’s capital markets is an indicator of overall economic performance and an integral part of a country’s economy. Through free and open economic policies and the introduction of advanced technology. Investors have easy access to capital markets. The fact that the capital market index has become an indicator of the health of a country’s economy shows the importance of the capital market. The increasing importance of capital markets has led to the development of many theories explaining how capital markets work (Gupta, Chavaller and Sayeki, 2008). Garcia and Liu (1999) found that macroeconomic volatility has no effect
capital market performance. On the other hand, Maku and Atanda (2010) report that the stock market
Performance in Nigeria is largely traded by long-term macroeconomic forces in Nigeria.
Ting, Feng, Weng, and Lee (2012) found that Malaysia’s Kuala Lumpur Composite Index is consistently influenced by short- and long-term interest rates, money supply, and consumer price indices. Mahwish (2013) found a negative relationship between real interest rates and Pakistani stock market performance. Jahur, Quadir, and Khan (2014) established microeconomic variables such as the consumer price index and interest rates that significantly affect the performance of the stock market in Bangladesh. It is worth noting that there is no consensus on the impact of macroeconomic factors on capital market performance. This study therefore examines the macroeconomic determinants of Nigeria’s capital market performance.
1.3 Research question
What is the relationship between capital markets and macroeconomics?
variable in Nigeria?
What are the impacts of macroeconomic variables on Nigeria’s capital markets?
performance?
1.4 Research objectives
The general purpose of this study is to investigate effects.
Chosen
Macroeconomic determinants of Nigeria’s capital market performance. specific
The purpose of this research is to:
Explore the relationship between capital markets and microeconomic variables
in Nigeria?
Examine the impact of macroeconomic variables on Nigeria’s capital markets
performance?
1.5 Research hypothesis
For the purposes of this study, the following hypotheses were tested.
Ho1 nothing important
The relationship between capital markets and macroeconomics
Nigerian variables
Ho2 There is no material impact of macroeconomic variables on Nigeria’s capital market performance.
1.6 Validity of research
Nigerian Securities and Exchange Commission and Nigerian Stock Exchange (policy makers); the findings will greatly assist in the formulation and implementation of policies related to stock price setting and the regulation of stock exchange trading. The government will also be informed on how to issue policies, rules and regulations related to trading rules that will help protect investors, encourage investment and boost economic growth. Companies/individuals (investors):
The findings will help them understand the factors that influence stock prices, making banks and other financial institutions an investor seeking research results to fund stock purchases, while also increasing investment options. You can get more information about how to choose. Additionally, scientists and researchers will find this study useful if they wish to use its results as a basis for implementation and further research on this subject.
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