A Test of Stock Market Efficiency in Nigeria: The Stock Supply Approach
Publication Date: 08/06/2020
Author(s): Abere Mojisola Anne, Ogunsanwo Odunayo Femi, Olowo Samson Oluwole, Edewusi Damilola Gabriel.
Volume/Issue: Volume 3 , Issue 3 (2020)
Abstract:
The study empirically attempted a test of stock market efficiency in Nigeria. The study employed stock market variables (market capitalization, all share index, volume of share and total value of shares) to cover the period of 31 years which spanned between 1986 and 2016. The data were sourced from CBN statistical bulletin and Stock Exchange annual report. The analysis was made through Descriptive statistics which involved trend analysis. The descriptive result revealed that the NSE followed the theory of random walk. This suggests that the current values do not have memory and thus, past values cannot be used to predict the current value. The trend analysis revealed the performance of stock market indices thereby indicating that any change that occurs in the supply of stock cannot be too small or unimportant to be of concern on stock price. This is because price movement of today may significantly determine price movement of tomorrow Based on this, the study recommended that there is the need for proper awareness on the benefits inherent in the capital market.
