SOURCE:

Faculty: Management Sciences
Department: Banking And Finance

CONTRIBUTORS:

Idika J. E.
Okaro C. S.
Okonkwo V. I.

ABSTRACT:

Global financial crises of 2007 and 2008 has been argued to have significant effects on nation’s financial system especially those that rely heavily on foreign collaborations. The Nigerian stock market had increasing performance indicators given the bank consolidation exercise in 2004. This work examined whether the global financial crises has any significant effect on the stock market performance in Nigeria. Time series data between 1986 and 2016 were collected from the Central Bank of Nigeria Statistical Bulletin and World Bank Data Bank. The data were log transformed to conform to linear rule and for easy interpretation. Descriptive statistics were carried out to expose some basic characteristics of the variables while autoregressive distribution lag and chow test were employed for the analysis.The findings revealed that there is a positive and non-significant relationship between foreign portfolio investment and All Share Index, external reserves and All Share Index, negative and significant relationship between exchange rate and all share index. The chow test conducted also revealed that there is no structural break among these variables particularly in 2008 when the global financial crises took a center stage in Nigeria. This shows that the global financial crises was not primarily responsible for the crash in the stock market prices in Nigeria, yet the work strongly recommend among others that Government and regulatory authorities should constantly check and monitor the participation of foreign investors in the Nigerian Stock market to avoid divestment problem as a result of contagion effect of panic in their home economies.