Impact of Financial Crisis on the Fluctuations of Nigerian Stock Market Development

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October, 2016
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Musleh (2009) studied the implications of the global financial on macroeconomic and development policies in Pakistan and discovered the financial crisis led to the fall of liquid assets, gradual economic development, currency value and equity prices decline, etc. According to Jenrola & Daisi (2012), the collapse of the Nigerian Stock Exchange is not credited to the global financial crisis but as a result of the volatility of macroeconomic variables. Previous studies conducted revealed divers results on the effects of the global financial crisis on the stock market covering shorter periods of analysis. This study is intended to examine impact of financial crisis on the fluctuations of Nigerian stock market Development taking into account a longer period analysis from 1990 to 2014. The study used the OLS regression technique to examine the magnitude of the effect of the financial crisis on the fluctuations in the Nigerian stock market development using annual time series from 1990-2014. The study revealed that financial crisis has had no significant on the development of the Nigerian stock market and so does inflation. Gross domestic product and exchange rate rather had an effect on the development of the Nigerian stock market. The study therefore recommended that policy makers make efforts to implementing favourable policies or measures aimed at improving economic growth and reducing the rate of inflation in the economy, regulatory authorities implement policies aimed at stock market development by encouraging more domestic currency purchase which yield in country‟s exchange rate appreciation, the Nigerian stock market should engage in activities which improve stock market development, regulatory authorities ensure transparent and fair trading transactions and dealings in the Nigerian stock market.
A Thesis submitted to the Department of Economics of the College of Social Sciences and Humanities, Kwame Nkrumah University of Science and Technology, in partial fulfillment of the requirement for the award of Master of Science Degree in Economics.