Statistical Analysis of the Daily Performance of the Nigerian Stock Exchange (July 2006 - June 2007)

Better Essays
STATISTICAL ANALYSIS OF THE DAILY PERFORMANCE OF THE NIGERIAN STOCK EXCHANGE (JULY 2006 – JUNE 2007)

BY
IKEGWU EMMANUEL M.
F/HD/04/3740001

BEING A PROJECT PRESENTED AS A REQUIREMENT FOR THE AWARD OF HIGHER NATIONAL DIPLOMA IN STATISTICS

PRESENTED TO
THE DEPARTMENT OF STATISTICS, YABA COLLEGE OF TECHNOLOGY, YABA LAGOS.

NOVEMBER 2007.

CHAPTER ONE

1.0 INTRODUCTION

Mobilisation of resources for national development has been the central focus of development economists. As a result of this, the centrality of savings and investment in economic growth has been given considerable attention in various literatures.
According to Ekpo and Umoh (2007), for sustainable growth and development, funds must be effectively mobilized and allocated to enable businesses and the economy harness their human, material and management resources for optimum output.

The stock market therefore is an economic institution which promotes efficiency in capital formation and allocation. The stock market enables government and industries to raise long-term capital for financing new projects, and expanding and modernizing industrial/commercial concerns. It should be noted that if capital resources are not provided to these economic areas, especially industries where demand is growing and which are capable of increasing production and productivity, the rate of the expansion of the economy often suffers. Hence Ekpo and Udoh opined that a unique benefit of the stock market to corporate entities is the provision of long-term, non-debt financial capital. Through the issuance of equity securities, companies acquire perpetual capital for development. Through the provision of equity capital, the market also enables companies to avoid over-reliance on debt financing, thus developing and improving debt - to – equity ratio.

The stock market is a market for the trading of company stock and the derivatives of the same which are securities listed on a stock exchange and those traded



References: 1. Aronson R. David (2006), Evidence-Based Technical Analysis, New Jersey, John Wiley and Sons. 2. Brock W., Lakonishok J., and Blake L. (1992), Simple Technical Trading Rules and the Stochastic Properties of Stock Returns, Journal of Finance Vol. 47(5) 3 4. Clarke J., Jandik T. and Gershon M. (2001), The ‘Efficient Market Hypothesis’, Expert Financial Planning Advice for Industry Leaders, New York, John Wiley and Sons. 5. Cohen J., Cohen P., West S.G. and Aiken L.S. (2003), Applied Multiple Regression/Correlation Analysis for the Behavioural Sciences, 2nd Edition, New Jersey, Lawrence Erlbaum Associates. 6. Draper N.R and Smith H. (1998), Applied Regression Analysis, Wiley Series in Probability and Statistics, New York, John Wiley and Sons. 7. Ekpo A.H. and Umoh O.J. (2007), An Overview of the Nigerian Economic Growth and Development, A Seminar Paper. 8. Eugene Fama (1970), Efficient Capital Market: A Review of Theory and Empirical Work, Journal of Finance Vol. 25. 9. Galton Francis (1886), “Regression Toward Mediocrity in Hereditary Stature”, Journal of the Anthropological Institute. 11. Hurst J.M (1972), The Profit Magic of Stock Transaction Timing, London, Prentice Hall. 12. Murphy J. John (1999), Technical Analysis of the Financial Markets, New York, Institute of Finance. 13. Olorunleke A. Oluwatoyin (2005), Investment in Shares and Stocks: The Professional Perspective, A Seminar Paper. 14. Roberts D. Edwards, John M. and Bassetti W.H.C (2001), Technical Analysis of Stock Trends, 8th Edition, American Management Association. 15. Schwagger d. Jack (1999), Getting Started in Technical Analysis, New York, John Wiley and Sons.

You May Also Find These Documents Helpful

  • Better Essays

    Ops-571 Assignment

    • 1146 Words
    • 5 Pages

    Lind, D., Marchal, W., & Wathen, S. (2010). Statistical techniques in business and economics (14th ed.). New York: McGraw-Hill.…

    • 1146 Words
    • 5 Pages
    Better Essays
  • Best Essays

    Lind, Marchal, and Wathen. (2008). Statistical techniques in business & economics (13th ed.). New York, NY: McGraw-Hill…

    • 2176 Words
    • 9 Pages
    Best Essays
  • Better Essays

    McClave, J.T., Benson, P.G., & Sincich, T. (2011). Statistics for Business and Economics (11th ed.).…

    • 991 Words
    • 4 Pages
    Better Essays
  • Best Essays

    entrepreneuship

    • 2107 Words
    • 9 Pages

    The stock market plays an essential role in the proper functioning of a country’s economy as it is a way to redirect capital to productive investments. The stock market plays a play a central role in the advancement of commerce, trade and development of the country which in turn impacts on the economy. The stock market index is one of the main indicators taken into account by investors willing to invest in the country.…

    • 2107 Words
    • 9 Pages
    Best Essays
  • Good Essays

    Hays, W. L. and R. L. Winkler (1975), Statistics: Probability, Inference, and Decision, 2nd ed. New…

    • 8957 Words
    • 36 Pages
    Good Essays
  • Good Essays

    Growth in Nigeria Economics

    • 5506 Words
    • 23 Pages

    that both corporation and investors get or receive fair prices for their securities. It examine the impact of capital…

    • 5506 Words
    • 23 Pages
    Good Essays
  • Powerful Essays

    Stock Market in Bangladesh

    • 5937 Words
    • 24 Pages

    The stock market is one of the most important avenues for companies to raise money. It mobilizes savings of large number of individuals, families and associations and makes the same available for meeting the large capital needs of organized industry, trade and business. In this way it helps in the progress and development of the country and its economy.…

    • 5937 Words
    • 24 Pages
    Powerful Essays
  • Satisfactory Essays

    Stock Exchange

    • 450 Words
    • 2 Pages

    Stock exchange accelerates the process of capital formation. It creates the habit of saving, investing and risk taking among the investing class and converts their savings into profitable investment. It acts as an instrument of capital formation. In addition, it also acts as a channel for right (safe and profitable) investment.…

    • 450 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    References: 1. D. Mason, A. Lind. 1999, Statistical Techniques in Business and Economics,10th edition, Jeffrey J. Shelstad, United States of America…

    • 10495 Words
    • 42 Pages
    Powerful Essays
  • Powerful Essays

    Capital Market mainly refers the Stock and Share market of the country. When banking system cannot totally meet up the need for funds to the market economy, capital market stands up to supplement it. Companies and the government can raise funds furlong-term investments via the capital market. The capital market includes the stock market, the bond market, and the primary market. Securities trading on organized capital markets are monitored by the government; new issues are approved by authorities of financial supervision and monitored by participating banks. Thus, organized capital markets are able to guarantee sound investment opportunities.…

    • 4729 Words
    • 19 Pages
    Powerful Essays
  • Powerful Essays

    Stock Market of Bangladesh

    • 10204 Words
    • 41 Pages

    A stock market / share market is a public market for the trading of company stock and derivatives at an agreed price; these are securities listed on a stock exchange. Usually, a stock market is the reflector of its countries economy. The stock market has become an essential market playing a vital role in economic prosperity that fostering capital formation and sustaining economic growth. Stock markets are more than a place to trade securities; they operate as a facilitator between savers and users of capital by means of pooling of funds, sharing risk, and transferring wealth. Stock markets are essential for economic growth as they insure the flow of resources to the most productive investment opportunities. In a growing economy like Bangladesh there are two stock or capital market, these are Dhaka Stock Exchange (DSE) and Chittagong Stock exchange (CSE). Both of these share market is regulated by Security exchange commission (SEC). However in recent times there are some opposite results are occurring in the stock market. That is not only hampering the capital of individual shareholders but also the country’s economy. As such circumstances’ are consistently occurring it has become a serious matter to concern. This paper reflects what are the problems behind stock market are and by considering what determinates such problems can be removed. This report also outlines whether the different factors as internal, external, economic factors etc. has impact on stock marketing.…

    • 10204 Words
    • 41 Pages
    Powerful Essays
  • Powerful Essays

    Bangladesh Stock Exchange

    • 15232 Words
    • 61 Pages

    Stock market is an essential part of capital market. The economy of our country largely depends on a strong capital market. Contribution of any stock exchange generally leads to economic growth by increasing the funds to finance industry and other enterprise.…

    • 15232 Words
    • 61 Pages
    Powerful Essays
  • Powerful Essays

    Timmermann, A., & Granger, C.W.J., 2004. Efficient market hypothesis and forecasting. International Journal Of Forecasting, 20(1), pp.15-27.…

    • 3117 Words
    • 10 Pages
    Powerful Essays
  • Good Essays

    Rengasamy Elango, Mohammed Ibrahim Hussein This paper tests for market efficiency across the seven stock markets in the GCC (Gulf Co-operation Council) countries. The GCC countries, of late, have been striving to strengthen their capital markets by introducing various innovative changes in relation to listing, regulatory, trading and settlement norms in order to improve transparency and informational efficiency. Using daily indices of the above markets between October 2001 and October 2006 and Kolmogorov –Smirnov test, we find that all the above seven markets reject the null hypothesis that the returns follow a normal distribution. Again, based on runs test for randomness, we find that the hypothesis pertaining to random walk and weak-form efficiency of the GCC markets is rejected for all the seven markets during the study period. This conclusion corroborates with the conclusions of the past studies carried out in GCC context and the developing and underdeveloped markets. The paper reiterates the need for an integrated GCC Stock market. The results and suggestions have wider implications for security analysts, investing community, stock exchanges, and other regulatory authorities in their policy decisions to improve their capital market functioning. Field of Research: Market efficiency, Random Walk, Kolmogorov – Smirnov test, Runs test for Randomness…

    • 7334 Words
    • 30 Pages
    Good Essays
  • Best Essays

    Fama E. (1970) “Efficient capital markets: a review of theory and empirical work”. Journal of Finance. 25:383–417…

    • 3810 Words
    • 16 Pages
    Best Essays