Stock Market Price and the Performance of the Residential Property Market in Kenya

The purpose of the study was to assess the effect of stock market price on the performance of the residential property market in Kenya. The surge of the residential property prices in Kenya has ignited concerns about the affordability of residential property houses in Kenya. The escalation of residential property prices raises question as to whether it is in tandem with other markets in the Country especially the stock market. Researchers have inconclusive findings on the direction of causation or the strength of the relationship between stock market and performance of residential property market in Kenya. This study adopted a positivist philosophical attitude using causal research design. The study used quarterly secondary data from 2005 to 2018. The study employed vector error correction residual serial correlation langrange multiplier test and vector error residual heteroskedasticity test as the diagnostic tests. Vector error correction model and auto-regressive distributed lag model were employed to test the hypothesis in the short run and long run respectively. The study found that stock market price had a negative effect on performance of residential property market in Kenya in the short term suggesting substitution effect while in the long run stock market price had a positive effect on the performance of residential property market in line with the wealth effect. The study concludes that stock market information spills over and affects residential property market performance in Kenya both in the long run and short run. The study has also contributed to the confounding empirical and theoretical literature and narrowed the research gap especially on the conflicting substitution effect and wealth effect of stock market and residential property market performance in Kenya. Keywords: Stock Market Price, Performance, Residential Property Market DOI: 10.7176/RJFA/10-18-15 Publication date:September 30th 201

Investment Governance: Delegation Decision Antecedents by Insurance Companies in Kenya

t Delegation decisions comprise a key component of investment governance structures of firms. Based on agency theory, this paper explores corporate governance and market dynamics as antecedents of investment management delegation by insurance firms in Kenya. Investment governance structures employed by firms are shaped by their unique circumstances and diverse considerations. The objectives of this research were to establish the influence of corporate governance and market dynamics on the investment governance structures of insurance firms in Kenya. The study adopted a descriptive approach with a target population of forty six firms in insurance and reinsurance business in Kenya. Both primary data and secondary data were collected. Data analysis was conducted using STATA relying on a binary logistic regression model. The study found that shareholder control, board diversity and avoidance of agency problems leads firms towards delegating their investment management activities. Desire to access alternative assets, peer influences and asset allocation considerations had a lesser extent of influence on firms towards delegation. The study concludes that large shareholder dictations and lack of investment management expertise in boards causes firms to adopt delegation models in their investment management. On the other hand, easy access to investment markets and constant supply of high yielding government bonds pulls firms towards internal investment management. It isrecommended that firms make appropriate choices on extent of delegation by carefully evaluating their needs and developing structuresthat deliver best outcomes

The influence of Equity and Trade credit Finance structure on SME’s Growth in Rwanda

The study investigated the influence of equity and trade credit finance structures on the growth of manufacturing SMEs in Rwanda. Two objectives guided the study; to determine the influence of equity finance structure on the growth of manufacturing SMEs in Rwanda and to investigate the influence of trade credit finance structure on the growth of manufacturing SMEs in Rwanda. The study used a mixed research design approach for collecting and analyzing data using a target population of 868 SMEs registered with Rwanda Development Board as of November 2017. Stratified random sampling technique was utilized to draw a sample size of 273 SMEs. Close-ended questionnaires were employed in data collection and data was analyzed using Statistical Package for Social Science (SPSS) to generate descriptive statistics including percentages, frequency tables and mean scores. Multiple regression analysis was used to explore the relationship between trade credit, debt finance and growth of small and medium size manufacturing enterprises in Rwanda. Analysis of variance (ANOVA) was utilized to test the significance of the model. R2 indicted the extent of the goodness fit of the regression model. The study findings showed that equity finance had a positive and significant influence on growth of small and medium manufacturing enterprise in Rwanda. Trade credit finance was also found to have a positive and significant influence on growth of small and medium manufacturing enterprise in Rwanda. The study recommends that the management of SMEs should be trained on the use of accounts receivable and accounts payable to fully take advantage of trade credit finance structure. This will ensure the SMEs grow their operations even during time of low liquidit

Market Risk Hedging Strategy and Financial Performance at Nigeria Stock Exchange Listed Banks

The main objective of the study was to determine the Market Risk Hedging strategy and financial performance of listed banks at Nigeria Stock Exchange (NSE). Contingency theory and Agency theory were used to expound on the effect of market risk hedging strategy and financial performance. Longitudinal cross sectional survey research design was adopted. The study’s target population includes all the 28 listed banks at Nigeria stock exchange. Data was collected from 2009 to 2018 for 20 listed banks in Nigeria. The secondary data sources for the period of between 2009 and 2018 were collected from Nigeria Stock Exchange and annual reports and accounts of the listed banks. The data was collected from audited financial statements of listed banks and other relevant internal report. Data collected was subjected to diagnosis tests of normality, autocorrelation, multicollinearity, linearity, homoscedasticity, stationarity, fixed and random effects. Correlation analysis was carried out to establish the relationship between the dependent and independent variables. Generalized Least Squares (GLS) regression analysis model was used to establish the relationship and significance between the study variables. The formulated hypotheses were tested. STATA statistical software version 10 was used for data analyses. The study found out that there are positive relationship between market risk hedging strategy and price earnings ratio which is the measure of financial performance of the listed banks at NSE. Based on the findings, the study concluded that Market Risk Hedging Strategies have a significant effect on financial performance of listed banks at NSE. The study recommends that there is need for the listed banks to effectively manage their risk as it was found that risk management positively influence financial performance of listed banks. The study further recommends that there is need for the management of listed banks to constantly check their banks’ exposure to credit risk, insolvency risk, and interest rate sensitivity. Keywords: Market Risk Hedging, Financial Performance. DOI: 10.7176/EJBM/12-15-11 Publication date:May 31st 202

Influence of Profitability on Dividend Pay-out among Deposit-Taking Saccos in Kenya

This study explored the influence of profitability on Deposit-Taking Saccos in Kenya. The study was motivated by inconsistency in the ability of Saccos to live up to their promise of paying dividends to members consistently. Many of them pay dividends from unforeseen profits and/or while highly leveraged. These unhealthy dividend practices leave Saccos unable to pay dividends in the long term sustainably, besides exposing them to insolvency. A census study was conducted involving 179 DT Saccos. This study used a cross sectional design to obtain data from all registered DT Saccos in Kenya (n=179) over an eight-year period (2012-2019). Panel data modelling was used. The findings showed that firms were experiencing declining profits during the study period. During the panel period, Saccos failed to improve their ability to generate resources from equity yet, they sustained a high dividend payout. To maintain their dividend payout, the DT-saccos borrowed funds to pay dividends The findings deepen our understanding of the interplay of factors influencing dividend payout in DT-Saccos in Kenya. Small saccos have higher dividend payout compared to large ones. Indeed, small saccos use dividends as a business strategy to retain and attract new members, thereby augment their capital. Keywords: Saccos, Dividends, Performance, dividend payout, Investment opportunity set DOI: 10.7176/IKM/11-4-10 Publication date:September 30th 202

Residential Mortgage Price Risk and Market Returns of Publicly Listed Mortgage Originators in Kenya

Interest rates play a critical role for mortgage originating firms. Interest rate volatility significant influences mortgage uptake among other factors. Empirical literature focus on the relationship between interest rate volatility, and financial performance, and stock return. However, literature is inconclusive and inconsistent with reference to the relationship between residential mortgage price risk and market returns for mortgage originating firms in Kenya. Consequently, the overall objective of this study was to ascertain the effect of residential mortgage price risk on market returns of publicly listed mortgage originators in Kenya. The Loanable Funds Theory of Interest and Efficient Market Hypothesis model were utilized as the theoretical foundation of the study. The study adopted a descriptive form of research design. A census was conducted on the target population - 11 publicly listed mortgage originators in Kenya. The study sourced its secondary data from the following sources: Central Bank of Kenya bank supervision reports, and the Nairobi Securities Exchange. Data was collected for the period between 2009 and 2019. The statistical software STATA was utilized to analyze data collected. A panel data regression model was used to draw inference from the data collected.  The mean and standard deviation findings for residential mortgage interest rate as 0.2193 and 0.11195 respectively. The findings reveal a significant negative effect of residential mortgage price risk on market returns of publicly listed mortgage originators in Kenya. It is recommended that mortgage originators use derivative instruments and competitive interest rates to hedge against fluctuations in interest rates. Keywords: Price Risk, Interest Rates, Mortgage, Mortgage Originators, Residential Mortgage. DOI: 10.7176/RJFA/12-10-10 Publication date:May 31st 202

The changing ecology of news: the impact of social networking sites on the production of news and the gatekeeping role of legacy media editors

The media landscape is changing, especially as more and more media audiences embrace social networking sites and consume their news content from social networking sites. Even as media organizations grapple with declining operations due to their traditional models of operation, media editors face a myriad of challenges, including competing with citizen journalism as they push to maintain and retain their journalistic duty of gatekeeping. In the face of the changing ecology of news, this study sought to establish the impact of social networking sites on the production of news and on the gatekeeping role of legacy media editors. The objectives were to assess the contribution of social networking sites to selection of news by legacy media, to establish patterns in the production of legacy media news in the era of social networking sites, and to examine the gatekeeping roles of legacy media editors in the wake of digital disruption. The gatekeeping theory and the networked gatekeeping theory formed the theoretical framework. The researcher adopted a qualitative research approach and a descriptive research design. The sample size of digital editors was arrived at through purposive sampling, and in-depth interviews were employed to generate data. The study established that social networking sites impact the production process of news and play a part in the selection of news by legacy media in Kenya. It also found that social networking sites have resulted in emergent patterns in news production and that feedback received from social networking sites impacts decisions made by editors in legacy media newsrooms. The study concluded that social networking sites have created an avenue for audiences to be part of the prod news production by legacy media newsrooms in Kenya even as legacy media editors are adopting newer strategies afloat and keeping up with the digital disruption. The researcher recommended setting journalistic standards for dealing with content from social networking sites and having l journalism stakeholders adhere to the standards as they embrace emergent patterns in their operations

Effect of Short-Term Debt on Financial Growth of Non-Financial Firms Listed at Nairobi Securities Exchange

A significant number of the non-financial firms listed at Nairobi Securities Exchange (NSE) have been experiencing declining financial performance which deter investors from investing in such firms. The lenders are also not willing to lend to such firms. As such, the firms struggle to raise funds for their operations. Prudent financing decisions can lead to financial growth of the firm. The purpose of this study is to assess the effect of short-term debt on financial growth of non-financial firms listed at Nairobi Securities Exchange for a period of ten years from 2008 to 2017. Financial firms were excluded because of their specific sector characteristics and stringent regulatory framework. The study is guided by Agency Theory and Theory of Growth of the Firm. Explanatory research design was adopted. The target population of the study comprised of 45 non-financial firms listed at the NSE for a period of ten years from 2008 to 2017. The study conducted both descriptive statistics analysis and panel data analysis. The result indicates that, short term debt explains 45.99% and 25.6% of variations in financial growth as measured by growth in earnings per share and growth in market capitalization respectively. Short term debt positively and significantly influences financial growth measured using both growth in earnings per share and growth in market capitalization. The study recommends that, the management of non-financial firms listed at Nairobi Securities Exchange to employ financing means that can improve the earnings per share, market capitalization and enhance the value of the firm for the benefit of its stakeholders. Keywords: Short Term Debt, Non-financial Firms, Nairobi Securities Exchange, Growth in Earnings per Share, Growth in Market Capitalization. DOI: 10.7176/RJFA/11-17-16 Publication date:October 31st 202

Fostering sustainable development through an ethics of care

The 7th annual Ethics Conferenc