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. 8 NO. 3 2024
DOI: 10.56201/wjfir.v8.no3.2024.pg108.124

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Is Inflation A Predictor of Stock Market Performance in Nigeria?

Edori, Iniviei Simeon, Ogbulu, Onyemachi Maxwell, Ejem, Chukwu Agwu

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Abstract

The research study examined the predictive powers of inflation on stock market performance in Nigeria focusing from 1990 to 2021 inclusive. This study employed secondary data sourced from Central Bank of Nigeria statistical bulletin 2022. The Error Correction Model was used to estimate the relationship between inflation and stock market performance. The results from the empirical test conducted showed that consumer price index, interest rate, exchange rate and oil prices impact insignificantly on the performance of stock market. Based on the findings, the researchers suggested that the Government should provide adequate policy that will seek to achieve single digit inflation rate in Nigeria. This will reduce the cost of living, increase in domestic production, and improve stock market performance. Again, Government should harmonize policy that will attract both local and foreign investment into the stock market.

keywords:

Consumer Price Index, Oil Prices, Exchange Rate, Interest Rate, All Share Index, ECM

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