Capital structure and the value of the firm: evidence from the Nigeria banking industry

Using data sourced from Nigerian commercial banks between the periods 2007 to 2012; this study examined the factor that magnifies the value of a firm. We used OLS technique and White-HAC heteroskedastcity test to infer the relationship between capital structure and the value of a firm in Nigeria. It was observed that debt instrument play significant role in magnifying the value of Nigerian banking firms, while equity role is partially significant. We suggest that bank managers as well as regulators adopt measures that will promote leverage usage so as to maximise the overall value of the firm

Tactical Assets Allocation: Evidence from the Nigerian Banking Industry

The core of portfolio selection theory centers on striking a balance between risk-return trade-off of a given investment layout so as to maximize benefits. Literature reveals that portfolio selection or asset allocation problems often involve the use of mathematical programming in propounding solution. This paper uses a blend of simultaneous equation and graphical approach to linear programming algorithm to help solve investors’ problem in allocating assets among various alternatives when faced with problems associated with risk-return trade-off

THE IMPACT OF INTERNATIONAL FINANCIAL REPORTING STANDARD (IFRS) ADOPTION ON KEY FINANCIAL RATIOS IN NIGERIA

Purpose: This study examined the effects of the adoption of the International Financial Reporting Standard (IFRS) on the quality of financial statements of agro-allied firms in Nigeria. Methodology: Battery of unit root test techniques and co-integration tests were deployed to examine the existence of long-run impact of relevance and reliability of financial reporting as provoked by IFRS adoption. The study made use of Panel Fully Modified Least Square techniques to examine the nature of the relationship between the Pre-IFRS and Post-IFRS adoption periods. Main Findings: The study noted that IFRS adoption has a substantial effect on the reliability and relevance of financial statements. Implications: The findings of this study help in shedding light on the impact of the IFRS on financial statements' reliability and relevance of listed agro-allied firms in Nigeria. Novelty: This study offers a unique understanding of the impact of IFRS adoption on financial ratios in Nigeria

MACROECONOMIC BEHAVIOUR AND FDI INFLOWS IN NIGERIA: AN APPLICATION OF THE ARDL MODEL

Based on the Macroeconomic theory of FDI movement, this study examined the relationship between FDI ~ and some selected macroeconomic variables both at the long and short run equilibrium in Nigeria. The study used ARDL estimation techniques to inquire if the selected macroeconomic variables have significant influence on FDI, what macroeconomic variable(:.) need to be manipulated so as to enhance inflows of FDI to the nation 's economy? What policy implication should be adopted? The results show that policy that attempt to expand trade, increase government expenditure, manipulate the exchange rate system, lower inflation and interest rates are useful in attracting FDI inflows

Towards Achieving Millennium Development Goals (MDG) in Nigeria: Prospect and Challenges

The Millennium Development Goals (MDG) according to analysts is the world biggest promise to mankind. It is a global mission with eight (8) vocal points of:  Eradicate extreme poverty and hunger; achieve universal primary education; promote gender equality and women empowerment; reduce child mortality; improve maternal health; combat HIV/AIDS, malaria and other diseases; ensure environmental sustainability; and develop a global partnership for development. In order to achieve these objectives, MDGs goals are sub-divided into eighteen (18) clear cut targets and forty-eight (48) indicators believed to be necessary as acid-test facilitator for the achievements of these laudable goals. These laudable goals are expected to be achieved between the years 1990-2015. Nigeria being a member of global committee of nations in the time past and recent adopts various developmental plans such as  VISION 2010,NEEDS,7-Points Agenda, VISION 20:2020, SURE etc within the framework of MDG to serve as driving force to achieve these laudable projects. Achieving these goals involves a lot of commitments. The essence of this paper is to examine through the use of non-parametric statistical test, the extent to which these goals (MDG) have been achieved and make relevant suggestions to aid speedy achievement of these goals. Keywords: Enrolment Rate, Gender Equality, Millennium Development Goals, Poverty Reduction, Targets and Indicator

Are African stock markets efficient? Evidence from wavelet unit root test for random walk

In this paper, we used the recently developed frequency based wavelet unit root test alongside a number of time domain unit root tests to examine the validity or otherwise of the random walk hypothesis for seven African largest markets. Unlike previous studies that affirms the validity of the random walk behaviour for African markets, our results reveal that when frequency domain is factored into stock market behaviour framework, evidence abound to reject the null of unit root test for each of the African markets studied. This implies that African markets are inefficient, contributes to growth and provide good opportunities for arbitrage trading. The results have critical implications for investors, policy makers as well as the academic

Stock Market Response to Economic Growth and Interest Rate Volatility: Evidence from Nigeria

This study examined the relationship between macroeconomic variable volatility and stock market return within the context of Blanchard (1981) extension of the Hicks (1937) IS-LM hypothesis, using exponential general autoregressive conditional heteroskedascity estimation techniques to analysis monthly data sourced on the Nigerian economy from January 1985 to December 2013. Our result shows that stock prices responds significantly to innovations in the interest rate and the real gross domestic product (RGDP), we therefore recommends that policy makers on the one hand should consider volatility in both the interest rate and the RGDP when making policies aimed at enhancing stock market development. On the other hand, market practitioners are expected to make provisions for volatility in interest rate and the RGDP when making portfolio decision

IMPACT OF OIL PRICE SHOCKS AND EXCHANGE RATE VOLATILITY ON STOCK MARKET BEHAVIOR IN NIGERIA

The impact of exchange rate and oil prices fluctuation on the stock market has been a subject of hot debate among researchers. This study examined the impact of both the exchange rate volatility and oil price volatility on stock market volatility in Nigeria, so as to guide policy formulation based on the fact that the nation’s economy was foreign induced and mono-cultured with heavy dependence on oil. EGARCH estimation techniques were employed to examine if either the volatility in exchange rate, oil price volatility or both experts on stock market volatility in Nigeria. The result shows that share price volatility is induced by both the exchange rate volatility and oil price volatility. Thus, it is recommended that policymakers should pursue policies that tend to stabilize the exchange rate regime on the one hand, and guarantee the net oil exporting position for the economy, that market practitioners should formulate portfolio strategies in such a way that volatility in both exchange rates and oil price will be factored in time when investment decisions are being made

Stock Market Volatility: Does our Fundamentals Matter?

This study used EGARCH estimation techniques to examine the impact of the systematic risk emanating from the macroeconomy on stock market volatility based on monthly data sourced from 1985 to 2013 on the Nigerian economy. Our results show that all the macroeconomic variables tested exerts on stock market pricing and that the stock market pricing is most influenced by exchange rate volatility. We thus recommend that policy makers on the one hand should pay close attention to the innovations in the macroeconomic variables when formulating macroeconomic or financial stability policy. On the other hand, market practitioners should calibrate volatility of macroeconomic variables in their portfolio decision making proces

Monetary Policy Dynamics and the Stock Market Movements: Empirical Evidence from Nigeria

The contributions of the stock market to economic growth can never be over-emphasized. In this paper, we used the Autoregressive Distributed Lag bound testing estimation techniques to examine the existence of any relationship between monetary policy instruments and the stock market in Nigeria based on the data sourced from 1985 to 2013. From the results obtained, it can be deduced that monetary policy instruments significantly exerts on stock market behaviour in Nigeria. We recommends that policy makers should put in place policies that aimed at adjusting the interest rate upward, reduce or at best keep at constant the money supply growth rate, increase the net credit to the private sector and manipulate the exchange rate regime so as to boost stock market