Research Article

Macroeconomic Variables and Share Price Movement: A Study of Listed Deposit Money Bank in Nigeria

NWANKPA, Ejike C.1*
1 Department of Banking and Finance, Nasarawa State University, Keffi, Nasarasa State, Nigeria
* Corresponding author: ejikenwankpa@yahoo.com
Published: Dec, 2022
DOI: 10.67894/bjms.2022.tmaw2ha4
Pages: 15-27

Abstract

This study was carried out to investigate the relationship between macroeconomic variables and share price movement in the Nigerian Banking sector within the periods from 2007 to 2021. Three macroeconomic variables were chosen as the independent indices; including the exchange rate, inflation rate, and interest rate. The dependent variable was actual closing share prices of Nigerian banks on the 17th day of February, May, August and November of each year. Information from the annual time series covering the period between 2007 and 2021 was used. The analysis started with examining the characteristics of each time series by testing their normality and correlation. The result of the data analysis using Panel Least Squares regression on e-views 10 shows that only inflation rate is significant in determining the movement of share prices of the deposit money banks in Nigeria during the period covered by the study. On the other hand, interest rate and exchange rate returned an insignificant result which implies that they cannot be used to explain variations in share price movement in the banking sector of Nigeria. Based on these findings, the study recommends that there is need to promote domestic production and diversification of the economy so as to control inflation, while further studies may focus on finding out more relevant macroeconomic variables that affect share price movement of Nigerian banks. 

Keywords

Interest Rate Inflation Rate Exchange Rate Banking Sector and Share Price

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How to Cite

C., N. E. (2022). Macroeconomic Variables and Share Price Movement: A Study of Listed Deposit Money Bank in Nigeria. Bayero Journal of Management Sciences, 4(2), 15-27. https://doi.org/10.67894/bjms.2022.tmaw2ha4

N. E. C., "Macroeconomic Variables and Share Price Movement: A Study of Listed Deposit Money Bank in Nigeria," Bayero Journal of Management Sciences, vol. 4, no. 2, pp. 15-27, December 2022. doi: 10.67894/bjms.2022.tmaw2ha4

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