Does the Capital Assets Pricing Model (CAPM) Predicts Stock Market Returns in Ghana? Evidence from Selected Stocks on the Ghana Stock Exchange.

This paper examined the applicability of CAPM in explaining the risk-return relation of selected stocks on the Ghanaian stock market for the period of January 2006 to December 2010. The test, using linear regression method, was carried out on the standard CAPM model with constant beta. The results obtained were statistically insignificant. Thus, the null hypothesis (Ho) that there are no statistically significant differences between the actual return and the predicted return series based on the CAPM estimates could not be rejected. The implication is that, the observed differences in the variables in the actual and the predicted returns were likely due to chance or other factors and not likely due to the systematic risk factors as measured by beta of the various stocks under studied. It was also revealed that all the stocks under studied were either undervalued or overvalued.   For instance, CAL, GCB, and SCB stocks were on the average undervalued for the period reviewed. SG-SSB stock was however overvalued on the average for the period reviewed. The conclusion drawn was that the standard CAPM with constant beta could not be used to statistically explain the observed differences in the actual and estimated return series of the selected stocks. Keywords: Under-priced, Systematic risk, Stock Exchange

The Impact of Inflation, Policy Rate and Government Consumption Expenditure on GDP Growth in Ghana: A Co-Integration Approach.

Macroeconomic variables such as Policy rate, government consumption expenditure, inflation etc. play vital roles in the economic performance of any country. The main objective of this paper was to investigate the effect that inflation, government consumption expenditure and Policy rate have on the real Gross Domestic Product (GDP) in Ghana. Data were taken from the World Bank’s World Development Indicators 2004 CD Rom.  Policy Rate data were obtained from publications and bulleting of the Bank of Ghana. Annual time series data covering the period from1980-2010 were used. In this paper we employed modern time series econometric methodology such as Unit Root Testing, Co-integration and Vector Error Correction Model (VECM) to model both the long run and short run relationships between inflation, government consumption expenditure and policy rate (independent variables) and Real GDP (dependent variable). The results of our estimates indicate positive long run relationships between inflation, and policy rate with real GDP. However government consumption expenditure has a negative impact on Real GDP in the long run. Also it was revealed that inflation and government consumption expenditure have a positive short run effect on Real GDP whereas Policy rate had an inverse relationship with Real GDP in the short run. Among the variables understudied in this paper, only inflation rate had a significant impact on the real GDP whiles Policy rate and government consumption expenditure have no significant impact on Real GDP in Ghana. It is recommended among others that the Government together with the Bank of Ghana should develop and pursue prudent monetary and fiscal policies that would aim at reducing and stabilizing both the micro and macroeconomic indicators especially inflation targeting so as to boast the growth of the economy. Keywords: Unit Root, Co-integration, Vector Error Correction Model (VECM) Gross Domestic Product, General Government Consumption Expenditure.

Examining the Dividend Growth Model for Stock Valuation: Evidence from Selected Stock on the Ghana Stock Exchange.

Gordon’s growth model is one of the popular models in finance use to value or evaluate the fundamental values of stocks. This study investigated the actual price on the Ghana Stock Exchange with its predicted prices based on estimates using the Gordon’s growth model for the selected banks. Monthly returns and stock prices from the Databank Stock Index (DSI) for five years were used for this study.  T-test has been employed to test the significance of the mean differences for yearly market return for five years. The findings of this study indicate that there are differences in the actual price series Po and the estimated price series Pi based on estimates using the Gordon’s growth model. In other words, the current market prices of these banks do not match up with the actual fundamental values of these banks. The results from the t-test for all the selected banks collectively rejected the null hypothesis that there are no differences in the actual price series Po, and the estimated price series Pi based on estimates using the Gordon’s growth model on the Ghana Stock Exchange. The results also show that CAL banks’ share prices over the years studied by this paper have been undervalued and even as at the end of 2010, it was still undervalued. It further shows that Ghana Commercial Bank (GCB) was undervalued over the last four years but as at the end of 2010, it was overvalued. Home Finance Company (HFC) however was overvalued over the last four years and it was as at 2010, overvalued. Standard Chartered Bank (SCB) on the other hand was undervalued in 2006 but was overvalued for three subsequent years and as at 2010, it was overvalued. Société Générale – Social Security Banks, (SG-SSB) has experience a mixed trend. It was undervalued in 2006, overvalued in 2007 and 2008, undervalued in 2009 and it was overvalued as at the end of 2010. The results further indicate that the Ghana Stock Exchange (GSE) bourse is inefficient. Key Words: Stock Market, Stock Index, Gordon’s Growth Model

Examining the Dividend Growth Model for Stock Valuation: Evidence from Selected Stock on the Ghana Stock Exchange.

Gordon’s growth model is one of the popular models in finance use to value or evaluate the fundamental values of stocks. This study investigated the actual price on the Ghana Stock Exchange with its predicted prices based on estimates using the Gordon’s growth model for the selected banks. Monthly returns and stock prices from the Databank Stock Index (DSI) for five years were used for this study.  T-test has been employed to test the significance of the mean differences for yearly market return for five years. The findings of this study indicate that there are differences in the actual price series Po and the estimated price series Pi based on estimates using the Gordon’s growth model. In other words, the current market prices of these banks do not match up with the actual fundamental values of these banks. The results from the t-test for all the selected banks collectively rejected the null hypothesis that there are no differences in the actual price series Po, and the estimated price series Pi based on estimates using the Gordon’s growth model on the Ghana Stock Exchange. The results also show that CAL banks’ share prices over the years studied by this paper have been undervalued and even as at the end of 2010, it was still undervalued. It further shows that Ghana Commercial Bank (GCB) was undervalued over the last four years but as at the end of 2010, it was overvalued. Home Finance Company (HFC) however was overvalued over the last four years and it was as at 2010, overvalued. Standard Chartered Bank (SCB) on the other hand was undervalued in 2006 but was overvalued for three subsequent years and as at 2010, it was overvalued. Société Générale – Social Security Banks, (SG-SSB) has experience a mixed trend. It was undervalued in 2006, overvalued in 2007 and 2008, undervalued in 2009 and it was overvalued as at the end of 2010. The results further indicate that the Ghana Stock Exchange (GSE) bourse is inefficient. Key Words: Stock Market, Stock Index, Gordon’s Growth Model

Understanding Households’ Residential Location Choice in Kumasi’s Peri-Urban Settlements and the Implications for Sustainable Urban Growth

This study was conducted against the backdrop of the rapid physical expansion of Kumasi and the concomitant growth of peri-urban settlements of mainly residential land use around the city’s main built-up area. Adopting the case study approach and selecting Abrepo and Esreso as study areas, it sought to understand the factors that inform households’ decisions to live in Kumasi’s peri-urban settlements. Based on households’ likelihood of change of residence in the future and their stated residential location preferences, the implications for sustainable urban growth were examined. The study found that family relations, relatively low land price and house rents as well as work-place proximity were the most significant reasons underpinning households’ choice of the urban periphery. In view of the aggregate cost reducing advantages associated with the urban periphery therefore, the study concludes that rapid expansion of the city into peripheral areas due mainly to residential development will continue to occur. It therefore suggests that urban development policies that aim at securing liveable conditions and promoting mixed-use development in the dominantly commercial central areas of the city will be crucial to managing growth and averting unsustainable urban expansion. Key words: location choice, peri-urban, sustainable urban growth, urban plannin

Does Liberalization of the Financial Sector Causes Economic Growth? Empirical Evidence from Ghana

In this paper, we examine the effect that financial sector liberalization has on macroeconomic performance in Ghana by using modern time series econometric analysis over the time period 1971-2010. This paper undertakes econometric models such as unit root testing, co-integration and Vector Error Correction (VECM) to empirically analyze the effect of financial sector liberalization on economic growth. Both the short-run and long-run effects of financial liberalization were studied. The results suggest negative and significant long-run relationship between financial liberalization and economic growth. The results are consistent with some of the other studies in other jurisdictions as described in the literature. Finally, it is concluded that the continual strengthening of the Central Bank’s capacity for supervision and prudential regulations such as such as the recent increase in reserve requirement by Bank of Ghana for various categories of financial institutions may have a long term positive effect on the performance of the economy as a whole. Keywords: Financial Liberalization; Macroeconomic Performance; Time Series Models, Co-integration, Vector Error Correction

Psychological Factors That Influence Teachers’ Perception of Head Teachers’ Leadership Styles in the Dormaa East District

The activities in the schools as well as the interactions that took place in the schools influenced teachers’ perception of head teachers’ leadership styles the most. The purpose of the study was to investigate the psychological factors that influence teachers’ perception of head teachers’ leadership styles. The study adopted an exploratory approach using a descriptive survey design. The study was carried out in 50 basic schools with a sample size of 217 teachers. The proportional random sampling method was used to select the respondents. The study showed that situation-specific factors namely; school culture, relationship with other teachers, interpersonal relationship with the head teacher, head teacher support, and GES policies being implemented influenced teachers’ perception of head teachers’ leadership styles. The study found no statistically significant difference between males and females in terms of factors influencing teachers’ perception of head teachers’ leadership style. It was recommended that the training of head teachers should include how to build healthy school culture in the schools. Keywords: Headteacher, Leadership style, Perception, Situation-Specific Factors DOI: 10.7176/JEP/13-21-08 Publication date:June 30th 202

Cultural Profile as Determinant of Work Outcomes in a Collectivist Context

Extant research evidence shows that interpersonal bonds—the bond to the immediate supervisor and work team—have an incremental predictive effect in western settings, neglecting emerging economic and cultural environments. This study, thus, examines the impact of cultural profiles on interpersonal bonds and related performance in an emerging market context. Specifically, the study examines the emergence of profiles based on micro-level psychological collectivism (individualism) and power distance orientations. The study further examines the effect of the emerged profiles on interpersonal bonds and the performance of activities related to the targets of the bonds. A survey questionnaire was used to collect data from 148 multiple public and private organizations of varied industries (banking, manufacturing, education, and local government) in an emerging market. Using the MANOVA analytic procedure, the study finds that the supervisor-oriented and team-involved profile rather than the team-alienated profile demonstrates a significantly higher level of work outcomes involving interpersonal commitment to the supervisor and substantially higher task performance. The outcome suggests that power distance cultural value may have a negative psychological effect while collectivism has a positive psychological effect on work outcomes in this context. The implication of the outcome for theory and policy in the collectivist context is discussed

Preparing for future outbreaks in Ghana:An overview of current COVID-19, monkeypox, and Marburg disease outbreaks

Amidst the ongoing COVID-19 pandemic, Ghana is currently grappling with simultaneous outbreaks of Marburg virus disease and human monkeypox virus. The coexistence of these outbreaks emphasizes the imperative for a collaborative and global approach to enhance surveillance and expedite case detection. While Ghana has made efforts to respond to these outbreaks, this paper outlines the lessons learned and proposes recommendations in this regard. It is crucial to intensify response efforts at the local, regional, and national levels to effectively contain the spread of these infectious diseases. Therefore, this paper suggests prioritizing the following recommendations as crucial for assisting Ghana in adequately preparing for future outbreaks and safeguarding global public health: strengthening surveillance system through digitization, rapid and effective response; risk communication and community engagement; healthcare system readiness; and research and collaboration. Also, prioritizing building healthy public policies and developing personal skills of health personnel across the country is key for future outbreak response.</p

Developing a modified low-density lipoprotein (M-LDL-C) Friedewald’s equation as a substitute for direct LDL-C measure in a Ghanaian population: a comparative study

Despite the availability of several homogenous LDL-C assays, calculated Friedewald\u27s LDL-C equation remains the widely used formula in clinical practice. Several novel formulas developed in different populations have been reported to outperform the Friedewald formula. This study validated the existing LDL-C formulas and derived a modified LDL-C formula specific to a Ghanaian population. In this comparative study, we recruited 1518 participants, derived a new modified Friedewald\u27s LDL-C (M-LDL-C) equation, evaluated LDL-C by Friedewald\u27s formula (F-LDL-C), Martin\u27s formula (N-LDL-C), Anandaraja\u27s formula (A-LDL-C), and compared them to direct measurement of LDL-C (D-LDL-C). The mean D-LDL-C (2.47±0.71 mmol/L) was significantly lower compared to F-LDL-C (2.76±1.05 mmol/L), N-LDL-C (2.74±1.04 mmol/L), A-LDL-C (2.99±1.02 mmol/L), and M-LDL-C (2.97±1.08 mmol/L) p \u3c 0.001. There was a significantly positive correlation between D-LDL-C and A-LDL-C (r=0.658, p\u3c0.0001), N-LDL-C (r=0.693, p\u3c0.0001), and M-LDL-C (r=0.693, p\u3c0.0001). M-LDL-c yielded a better diagnostic performance [(area under the curve (AUC)=0.81; sensitivity (SE) (60%) and specificity (SP) (88%)] followed by N-LDL-C [(AUC=0.81; SE (63%) and SP (85%)], F-LDL-C [(AUC=0.80; SE (63%) and SP (84%)], and A-LDL-C (AUC=0.77; SE (68%) and SP (78%)] using D-LDL-C as gold standard. Bland-Altman plots showed a definite agreement between means and differences of D-LDL-C and the calculated formulas with 95% of values lying within ±0.50 SD limits. The modified LDL-C (M-LDL-C) formula derived by this study yielded a better diagnostic accuracy compared to A-LDL-C and F-LDL-C equations and thus could serve as a substitute for D-LDL-C and F-LDL-C equations in the Ghanaian population