Response of Deposit Money Banks to Monetary Policy Dynamics in Nigeria

This study examined how banks react to the monetary policies transmission mechanisms of the central bank of Nigeria. The data employed were collected from Nigerian Deposit Insurance Cooperation and Central Bank of Nigeria and subjected to various finametric techniques. The major findings are that cash reserve ratio negatively and significantly affects the performance of deposit money banks in Nigeria, while other monetary policy variables exert insignificantly to the performance of deposit money banks. It was also found that apart from banks own shock; banks respond negatively to shocks from major monetary policy instruments. It was observed that Monetary Policy Rate causes bank performance in both in the short run and long run. While, Cash Reserve Ratio, Liquidity Ratio and Saving Deposit Rate do not cause bank performance in the short run but in the long run. It was also found that monetary policy instruments jointly cause bank performance in the short and long run as opposed by individual instruments in Nigeria. The researchers therefore suggest among others that central bank of Nigeria reduce the cash reserve ratio to enable deposit money banks extend more loans to their potential customers, thereby enhance performance

Nigerian Stock Exchange and Weak Form Efficiency

This study, Nigerian Stock Exchange and Weak Form Efficiency with two intervals of All Share Index collected from the Nigeria Stock Market fact books. This study employed various parametric tools found for daily and annual all share index as follows: a significant relationship between the price series and their lagged values; coefficient of variance equations are statistically significant; price series do not follow a random walk or are abnormally distributed; level series not significant and causality is found in daily price series with no causality found in the annual price series. The finding in this study in balance affirmed that the Nigeria Stock Exchange is not efficient in weak form, by extension is inefficient in any form. As result the researchers suggest to the supervisory and regulatory authorities to promulgate laws that will strengthen the Nigerian Stock Market. Keywords: NSE, Weak Form, Parametric Tools DOI: 10.7176/RJFA/11-8-09 Publication date: April 30th 202

Test of Weak Form Efficiency and Nigerian Foreign Exchange Market Volatility

Beside the stated concerns for this study, a lot of scholarly articles abound on the test of weak form efficiency and capital market. For that, the researchers deemed it fit to test if the Nigerian foreign exchange market follows a random walk or not.  This and others led to this study, test of weak form efficiency and volatility of the Nigerian foreign exchange market with the following parametric tools; Augumented Dickey Fuller (ADF) unit root test, Pairwise Granger Causality test, Regression test, Normality/Random Walk test, ARCH-GARCH Model, the Autocorrelation cum partial autocorrelation method and Variance Ratio Test. After the analysis, all the results confirmed that the Nigerian foreign exchange market does not follow a random walk, hence weak form inefficient. No wonder the exchange rate business in Nigeria is very lucrative. The dealers always make abnormal profit at every slightest opportunity. Again, the result of the EGARCH framework found that volatility exacts negative impact on Nigerian foreign exchange market and that exchange rate volatility in Nigerian foreign exchange market is persistent. Again, that there is no asymmetric effect in the Nigerian foreign exchange market. Consequent upon the findings, the researchers suggest that the regulatory authorities of the Nigerian foreign exchange market tighten up their belt to enhancing the efficiency of the market. Again, the authority must do everything to stabilize the naira to ensure efficiency in the foreign market in Nigeria. Keywords: Weak form, Foreign Exchange Market, Parametric tool, Nigeria DOI: 10.7176/RJFA/11-16-14 Publication date:August 31st 202

Response of Banks to Fiscal Policy Stimuli in Nigeria

This study went into much neglected area of research; relationship between fiscal policy instruments and performance of banks in Nigeria. Various finametric tools were used to analyze data collected from Nigerian Deposit Insurance Cooperation and Central Bank of Nigeria for period of 1989 to 2018 inclusive. Resounding empirical findings were made as follows; Bank performance is autoregressive. That suggests that performance of banks in the past cannot be predicting future bank performance. It was conspicuously observed that Capital Expenditure, Non-Oil Revenue and Domestic Debt have positive and significant relationship with bank performance, while Recurrent Expenditure Domestic Debt afterwards negatively and significantly impact bank performance. It was also found that fiscal policy variables (Capital Expenditure, Recurrent Expenditure, Non-Oil Revenue and Domestic Debt) significantly impact bank performance both in the short run and long run. Since fiscal policy variables are found to exert significant impact banks’ performance in Nigeria, the researchers suggests to Federal government of Nigeria as a matter of urgency reconsiders the operation of Treasury Single Account. It is the view of the researchers that the Treasury Single Account be operated through deposit money banks by domesticating various Ministries, Departments and Agencies (MDAs) account with the deposit money banks. Keywords: Bank Performance, Fiscal Policy, ARDL, Nigeria. DOI: 10.7176/RJFA/11-8-12 Publication date: April 30th 202

Sensitivity of Foreign Direct Investment to Monetary Policy Dynamics in Nigeria

Due to the recent slowdown in foreign direct investment in Nigeria, this study considered it necessary to look at the monetary policy dynamics of Nigeria to ascertain if there are gaps in transmission processes.  The study made use of annual data from 1988 to 2019 on Foreign Direct Investment (FDI) and four other monetary policy variables; Liquidity Ratio, Monetary Policy Rate, Prime Lending Rate and Degree of trade Openness collected from the globaleconomy.com and Central Bank of Nigeria Statistical Bulletin to examine the relationship between Foreign Direct Investment (FDI) and monetary policy dynamics using Autoregressive Distributive Lags. The major findings are; that monetary policy rate and degree of trade openness have negative and significant relationship with foreign direct investment, while liquidity ratio and prime lending rate insignificantly relate to the foreign direct investment. However, since monetary policy rates is disclosed to significantly but negatively relate to foreign direct investment, the central bank of Nigeria should reduce further the rate in order to woo foreign investors to do more business in Nigeria. Again, since globalization and trade liberalization have totally removed the issue of countries being in the state of autarky (closed economy), most of the beggars thy neighbours policies should be discarded at least to enhance the degree of trade openness. The Central Bank of Nigeria should also conduct the monetary policy with the aim of encouraging foreign investment in Nigeria. Keywords: FDI, Monetary Policy, ARDL, Nigeria DOI: 10.7176/RJFA/11-16-06 Publication date:August 31st 202

Dynamic Modeling of Market Value and Capital Structure in Nigerian Firms

  In this paper, the researchers employed Panel generalised method moments to examine the controversy facing the dynamic relationship between market value of firms and capital structure. The made use of twenty four quoted firms from ten sectors in Nigeria between 2010 and 2017 inclusive. Modigliani and Miller (1958), states that the value of a firm should not depend on its capital structure whereas Myers (1984) Static Trade-off Theory and Income theory support the relevance of capital structure in determining the firm's value. However, this study revealed that both equity and debt capital instruments at first difference impact positively and significantly on the market value of firms. That means the researchers findings support the argument that capital structure is relevant to market value of firms. It is the opinion of the researchers that based on the outcome of this study, that firms should have a mix of both debt and equity in their financing structure in order to enhance the market value of the firm. It should be done in an optimal way so as to achieve the desired objective of increase in market value of the firm. Keywords: Market Value, Equity and Debt Capital, Dynamic Modelling, Panel Generalised Method of Moments JEL Classifications: G32, C58 DOI: https://doi.org/10.32479/ijefi.884

Dynamic Interactions of Nigerian Stock Market and Macroeconomic Variables

This study investigated the Dynamic Interactions of Nigerian Stock Market and Macroeconomic Variables with annual data collected from the Central Bank of Nigeria, Nigerian Stock Exchange Fact Books and National Bureau of Statistics from 1985 to 2018. It was found that economic growth proxied by Growth Domestic product and Interest rate have positive and significant relationship with all share index within the period of study, while inflation exerts negative influence on All Share Index. It was also found that exchange rate has insignificant impact on All Share Index within the scope of the study. Consequently, the researchers are of the opinion among others that government and her regulatory bodies devise adequate measure to curtail inflation in Nigeria. Keywords: Nigeria Stock Market, All Share Index, Macroeconomic Variables, ARDL. DOI: 10.7176/RJFA/11-8-04 Publication date: April 30th 202

Do Capital Market Returns Actually Predict the Standard of Living of A Nation:Evidence from Nigeria

The study tried to resolve the disagreement in many quarters that the returns of the capital market do not predict or relate to the standard of living of a reporting nation. The position of the researchers in this study was taken by using Nigeria Stock Exchange data and world bank website from 1985 to 2021 and analyzed with Error Correction Mechanism, among others. The result of the cointegration test showed that long run relationship exists between the dependent variable-standard of living proxied by Per capita Gross Domestic Product and independent variables, All-Share Index, Value of Transactions and Volume of Transactions. Further analyses revealed that All Share Index significantly relate to standard of living, while other variables insignificantly impact standard of living in Nigeria. However, the Granger causality test showed that the Per Capita Gross Domestic Product granger causes the Value of Transaction in the Capital Market; implying that Standard of living in Nigeria that determines the Value of Transactions in the Capital Market and not the other way round. It is also observed that Per Capita Gross Domestic Product (standard of living indicator) is not autoregressive or does not reinforce itself; which statistically is confirmed evidence showing that standard of living in the past cannot predict future standard of living in Nigeria. It is on these premises that the researchers recommend among others that policies should be put in place to enhance the growth of the capital market which will ultimately impact on the standard of living of Nigerians. Keywords: Standard of living, Capital market, ECM, Nigeria DOI: 10.7176/RJFA/13-12-07 Publication date:June 30th 202