Submit your papersSubmit Now
For Enquiries: [email protected]
IIARD LogoIIARD

Impact of Monetary Aggregates on Stock Market Returns in Nigeria

BARBER, Benard, MSc, EHIEDU, Victor C, PhD, Erhijiakpor Andrew EO, PhD

Abstract

This study examined the impact of monetary aggregates on stock market returns in Nigeria for the period of 1993-2023 (31years). Data for the study was obtained from CBN Statistical Bulletin and CBN Annual Report (1993-2023). The Monetary aggregates was proxied with Reserve Requirement (RR), Cash Reserve Ratio (CRR), Discount Rate (DR), Money Supply (MS), Interest Rate (INTR) and Exchange Rate (EXCHR) (Independent Variables) examined on how it influence the stock market returns [proxied with All Share Index (ASI)] (Dependent Variable). Data was analyzed using the descriptive statistics, correlation matrix and several diagonistics tests, followed by the unit root test, ARDL Bound Co-integration test, and ARDL Co-integrating and Long form were utilised via Econometric Views version 9.0. The findings revealed that RR has a p-value of 0.7261 on the short run and a p-value of 0.7288 on the long run, respectively. This suggests that both in the short and long terms, RR has no significant impact on ASI in Nigeria. CRR has a p- value of 0.7261 on the short run and a p-value of 0.7288 on the long run, respectively. This suggests that both in the short and long terms, CRR has no significant impact on ASI in Nigeria. DR has a p-value of 0.2773 on the short run and a p-value of 0.5479 on the long run, respectively. This suggests that both in the short and long terms, DR has no significant impact on ASI in Nigeria. MS has a p-value of 0.8558 on the short run and a p-value of 0.8576 on the long run, respectively. This suggests that both in the short and long terms, MS has no significant impact on ASI in Nigeria. An increase in the money supply is associated with a positive but insignificant effect on the ASI. INTR has a p-value of 0.2299 on the short run and a p-value of 0.4686 on the long run, respectively. This suggests that both in the short and long terms, INTR has no significant impact on ASI in Nigeria. EXCHR has a p-value of 0.8120 on

References

Adamu, H. & Zubairu, A. (2022). Money market indicators and stock market volatility in Nigeria: Evidence from GARCH-in-Mean Model. East African Scholars Journal of Economics, Business and Management, 5(9), 263-268. Adaramola, O. Y. & Oye, S. A. (2020). Interest rate, inflation rate and all share index: The case of Nigeria. International Journal of Finance and Banking Research, 6(3), 43-56. Adeniji, S. (2020). Monetary aggregates and stock market performance in Nigeria. Journal of African Economies, 39(2), 215-230. Adeniran, A., & Azeez, U. (2020). Impact of monetary policy on stock market returns in Nigeria. CBN Journal of Applied Statistics, 11(1), 59-82. Agbogun, O. E., and Ehiedu, V. C. (2022). Trade policy drivers and economic performance of OPEC Member States. International Journal of Academic Accounting, Finance, and Management Research, 6(8), 109-118. Ajeigbe, T. (2022). Dynamics of oil price, exchange rate, and trade performance of quoted industrial sectors in Nigeria. African Journal of Economic Studies, 15(2), 98-123. Akinboade, O. A. & Olaleru, S. A. (2019). An assessment of the impact of cash reserve ratio on inflation in Nigeria. International Journal of Advanced Engineering Research and Science, 6(9), 197-204 Akonji, A., Oke, M., & Ehinomen, I. (2020). Reserve requirements and inflation in Nigeria: An empirical analysis. Journal of Economics and Sustainable Development, 11(18), 1-10. Alugbuo, C. J. & Ekwugha, J. C. (2020). Monetary policy and stock market performance: Evidence from Nigeria stock exchange market. International Journal of Research and Innovation in Social Science (IJRISS), 4(6), 556-566. Anaele, S.C. & Umeora, C.E. (2019). Monetary policy and the performance of the Nigerian Capital Market (1986- 2017). International Journal of Research in Engineering Science and Management, 2(7), 59-72. ANUKU, C.E.O and EHIEDI, Victor Chukwunweike (2007). Financing Micro-Industries in Nigeria for Sustainable Development. Journal of Public Policy Alert/ Association for Public Policy Analysis (APPA)/ Aba. Abia State. Pp.75-89. Vol. 1(1) Anyanwu, C. C. & Ohurogu, D. U. (2024). Stock market liquidity in Nigeria: The effects of interest rate and money supply. Nigerian Journal of Management Sciences, 25(1), 114-126. Babangida, J. S. & Khan, A. I. (2021). Effect of monetary policy on the Nigerian stock market: A smooth transition autoregressive approach. CBN Journal of Applied Statistics, 12(1), 1-21. Biala, S., & Oladejo, J. (2022). Investigating the relationship between exchange rates and stock prices in Nigeria (1988-2020). Nigerian Economic Review, 28(4), 112-135. Ebhotemhen, W. (2023). The study of interactions between the stock market and some selected macroeconomic variables in Nigeria. Yobe Journal of Economics (YOJE), 8(1), 200-211. Echekoba, F. N., Ananwude, A. C., & Lateef, O. (2018). Effect of Monetary Policy on the Performance of the Nigerian Capital Market (1986-2016): Stylized Facts from ARDL Approach. Advances in Research, 14(6), 1-15. Ehiedu Victor C (2015). Impact of Interest Rate Deregulation on Corporate Financial Strategies (CFS) of Manufacturing Industries in Nigeria. Ph.D Thesis, Department of Accounting, Banking and Finance, Delta State University, Abraka, Nigeria Ehiedu, Victor Chukwunweike. (2021). Policy Options for Nigeria on Fiscal Responsibility. Journal of Finance, Governance and Strategic Studies. Collaborative Research (CORE) Associates. Faculty of Humanities, Management and Social Sciences. Federal University, Wukari. Taraba State. Nigeria. Pp. 19-34, 4(2) Ehiedu, Victor Chukwunweike. (2021). Minimum Rediscount Rate and Credit Creation by Deposit Money Banks in Nigeria. Nigerian. Journal of Financial Research/ Department of Finance and Banking. University of Port Harcourt. Pp. 80-93, 16(1) Ehiedu, Victor Chukwunweike. (2021). Determinants of Deposit Accumulation Strategies of Deposit Money Banks (DMBs) in Nigeria. African Journal of Accounting, Finance and Marketing/ University of Port Harcourt Business School. Pp. 32-54, 5(1) Ehiedu, Victor C and Ogbeta, Mercy. (2014). An Investigation into the Internal Control System in the Banking Industry (A Case of Some Selected Banks in Asaba, Delta State. European Journal of Business and Management. ISSN 2222-1905 (Paper) ISSN 2222-2839 (Online). International Institute for Science, Technology & Education, UK. Pp. 149-155, 6(9) Ehiedu, Victor C and Osiegbu P.I. (2014). Capital Structure and Performance Evaluation in Manufacturing Sector: A Case Study of Selected Quoted Companies in the Nigerian Stock Exchange (NSE). Research and Journal of Finance and Accounting. ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online). International Institute for Science, Technology & Education, UK. Ehiedu, Victor C. (2014). The Impact of Liquidity on Profitability of Some Selected Companies. The Financial Statement Analysis (FSA) Approach. Research and Journal of Finance and Accounting. ISSN 2222-1697 (Paper) ISSN 2222-2847 (Online). International Institute for Science, Technology & Education, UK.. Pp. 81-90. 5(5) Ehiedu, Victor C, (2022). External Debt (ED) and Growth Nexus (GN) in Nigeria. International Journal of Academic Management Science Research (IJAMSR)/. Academic Research World (IJARW). Pp. 58-68, 6(7). Ehiedu, Victor C. (2022). Monetary Jeopardy (MJ) and Nigeria’s Deposit Money Bank Performance (DMBP) Relationship: ARDL Approach. International Journal of Advanced Economics P-ISSN: 2707-2134, E-ISSN: 2707-2142 DOI: 10.51594/ijae.v4i8.409 Fair East Publishers. Pp. 180-198, 4(8) Okolie, Joseph O and Ehiedu, Victor C, (2023). Foreign Portfolio Investment Flow (Fpif) and Nigerian Stock Exchange (NSE). International Journal of Management & Entrepreneurship Research P-ISSN: 2664-3588, E-ISSN: 2664-3596 DOI: 10.51594/ijmer.v5i2.441. Fair East Publishers. Pp. 85-98, 5(2) EHIEDU Victor C. (2023). Tax Returns and Development of Infrastructure: The Nigerian Experience. Journal of Xidian University. DOIhttps://doi.org/10.37896/jxu17.2/028. ISSN No. 1001-2400. University of Xidian Publications. Pp. 400-412. 17(2) EHIEDU Victor C. (2023). Trade Drivers and Balance of Payment Equilibrium in Nigeria: Pre and Post Covid-19 Era. Journal of Xi’an University of Architecture & Technology. . DOI: https://doi.org/10.37896/JXAT15.3/31756. ISSN No: 1006-7930. Xi’an University of Architecture & Technology. Pp. 77-96. 15(3) EHIEDU Victor C. (2023). Financial Innovation (FIs) and Performance of Deposit Money Banks (PMDBs) in Nigeria. Innovations. 19650256 (E) 12674982(P). 62 Rue Pierre Motte. Saint- Dizier. Champagne-Ardenne. France 44522. Innovations Publications. Pp. 573-587. 72(03) EHIEDU Victor C and Toria Gladys, (2022). Audit Indicators and Financial Performance of Manufacturing Firms in Nigeria. Linguistics and Culture Review. Pp. 14-41 6(S1). https://doi.org/10.21744/lingcure.v6nS1.1887. (Special Issue on Economics, Accounting and Management EAM). American Linguist Association. New York. USA. Ehiedu, V.C. and Obi, C.K, (2022). Efficient market hypothesis (emh) and the Nigerian stock Exchange in the midst of global financial crisis. International Journal of Academic Management Science Research (IJAMSR)/. Academic Research World (IJARW). Pp. 263-273 Ehiedu V.C and Imoagwu C.P, (2022). Effect of corporate diversification strategies on the financial performance of industrial goods in Nigeria. International Journal of Applied Research in Social Sciences P-ISSN: 2706-9176, E-ISSN: 2706-9184 DOI: 10.51594/ijarss.v4i8.390 Fair East Publishers Ehiedu Victor C, and Imoagwu Chika Priscilla, (2022). Firm specific determinants and its implication on listed oil and gas firms profitability in Nigeria. International Journal of Advanced Economics P-ISSN: 2707-2134, E-ISSN: 2707-2142 DOI: 10.51594/ijae.v4i7.389 Fa

More Articles from IIARD INTERNATIONAL JOURNAL OF BANKING AND FINANCE RESEARCH

Effect of Monetary Policy on Profitability of Deposit Money Banks in Nigeria

Author: Stephanie Nguhemen Gbande, Mike T. Soomiyol, Timothy Tyona, Gaius Msendoo Asombo

Cognitive Diversity and Performance of Deposit Money Banks in Nigeria

Author: 1Nwangwu, Okwudiri Iheanyi, 2 Pepple, Grace Jamie PhD

Banking Innovations and Industrial Sector Performance in Nigeria: Evidence from ARDL Model

Author: Peter Ngbede Ajam, Abiodun Edward Adelegan, Benson Emmanuel

Environmental Sustainability and Entrepreneurial Performance in Nigeria: A Case Study of Enugu State

Author: i, Azolike Nkiru Nkechi, ii, Okwor Emmanuel Ejimnkonye, iii, Eneaniofu Daniel Mmaduakonam