IIARD International Institute of Academic Research and Development

WORLD JOURNAL OF FINANCE AND INVESTMENT RESEARCH (WJFIR )

E-ISSN 2550-7125
P-ISSN 2682-5902
VOL. 7 NO. 3 2023
DOI: https://doi.org/10.56201/wjfir.v7.no3.2023.pg80.99

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Unclaimed Dividends and Share Price Movements in the Nigerian Equities Market

Awa, Michael Uduma, Prof. B. O. Osuka and Dr. K. C. Otiwu

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Abstract

This study investigated the effects of unclaimed dividends on share price movements in the Nigeria equities market for the period 1991 to 2021. Unclaimed dividend was disaggregated into less than 15 months unclaimed dividends, unclaimed dividends with registrars and unclaimed dividends with companies; while All-Share Index was used to represent share price movements. Data on these variables were collected from SEC and CBN statistical bulletins for 2021. The Autoregressive Distributed Lag (ARDL) technique was the major analytical too employed. Thus, the data generated for the study were also exposed to unit root test, ARDL short and long run analysis, ARDL bounds test and ECM estimation. In addition, there were diagnostics test for the presence of serial correlation and heteroscedasticity. Basically, the study revealed that in the short run, less than 15 months unclaimed dividends and unclaimed dividends with companies have positive insignificant effects on ALSI while in the long run, unclaimed dividends with registrars and unclaimed dividends with companies have positive and significant effects on ALSI. The study also revealed that a long equilibrium relationship subsists between unclaimed dividends and share price movements; however, the speed of adjustment in event of disequilibrium is about 86.78%. The study as such concluded that unclaimed dividends have a long term significant effect on share price movements in the Nigeria equities market as expected. It was then suggested amongst other things that extra measures, like going after these shareholders who for one reason or the other have abandoned their shares and dividends, should be adopted to drastically reduce the volume of unclaimed dividends with registrars and companies, as this continues to be a negative signpost for the country’s equities market.

keywords:

Unclaimed Dividends, Share Price Movements, Nigerian Equities Market

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References:

Adediran S.A. & Alade S.O. (2013) Dividend Policy and Corporate Performance in Nigeria.
American Journal of Social and Management Sciences, doi:10.5251/ajsms.2013.4.2.71.77

Bhattacharya, S. (1979). Imperfect Information, Dividend Policy and The Bird in the Hand
Fallacy. Bell Journal of Economics, 10, 259-270.

CBN (2021). Central Bank of Nigeria Statistical Bulletin, 32.
Chen, J. and Scott, G. (2020). What is an Equity Market?
https//www.investopedia.com/terms/e/equitymarket.asp

Dickey, D.A. & Fuller, W.A. (1981). Likelihood Ratio Statistics for Autoregressive Time Series
with Unit Root. Econometrica, 49, 1057-1072.

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