Macroeconomic Variables and Private Investment: A Two Dimensional Study from Nigeria Economy

2019 ◽  
pp. 20-37
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Private Equity ◽  
Inflation Rate ◽  
Private Investment ◽  
Financial Deepening ◽  
Equity Investment ◽  
Macroeconomic Variables ◽  
Insignificant Effect ◽  
Real Investment

The study investigated the impact of macroeconomic variables on private investment in Nigeria for the period 1990 to 2016. To achieve these objectives, the study tests for the study modeled private equity and private real investment as the function exchange rate, financial sector development, and interest rate, openness of the economy, real gross domestic product, inflation rate and broad money supply. Ordinary least square method of data analysis was used. From model one, the study found that real gross domestic product have positive but insignificant effect, openness of the economy have positive and insignificant effect, interest rate have positive and significant effect, financial deepening have positive and insignificant effect while interest rate, inflation rate and exchange rate have negative effect on private real investment. The coefficient of determination (R2) proved that the independent variables can explain 62 percent variation on private real investment; the f- statistics found that the model is significant while the Durbin Watson statistics proved the presence of serial autocorrelation. The effect of macroeconomic variables on private equity investment was presented in model two. The study found that openness of the economy; real gross domestic products, broad money supply, and interest rate have negative and insignificant effect on private equity investment except openness of the economy with significant effect. Inflation rate, financial sector deepening and exchange rate have positive and insignificant effect on private equity investment except financial deepening with significant effect. The R2 proved that the independent variables can predict 66.9 percent variation on private equity investment. The f- statistics found that the model is significant while the Durbin Watson statistics proved the presence of serial autocorrelation. We conclude that macroeconomic variable have significant effect on private investment in Nigeria. We recommend that interest rate must be able to encourage higher private investment by increasing the real interstate on private savings or household savings so that larger amount of income would be saved to accumulate more capital and hence private investment. Policies should be formulated by investors and government to discourage factors that affect negatively private investment.

Macroeconomic Variables and Private Investment: A Two Dimensional Study from Nigeria Economy

2019 ◽  
Vol 1 (1) ◽  
pp. 20-37
Author(s):  
Fortune Bella Charles ◽  
Charles Ugochukwu Okoro
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Private Equity ◽  
Inflation Rate ◽  
Private Investment ◽  
Financial Deepening ◽  
Equity Investment ◽  
Macroeconomic Variables ◽  
Insignificant Effect ◽  
Real Investment

The study investigated the impact of macroeconomic variables on private investment in Nigeria for the period 1990 to 2016. To achieve these objectives, the study tests for the study modeled private equity and private real investment as the function exchange rate, financial sector development, and interest rate, openness of the economy, real gross domestic product, inflation rate and broad money supply. Ordinary least square method of data analysis was used. From model one, the study found that real gross domestic product have positive but insignificant effect, openness of the economy have positive and insignificant effect, interest rate have positive and significant effect, financial deepening have positive and insignificant effect while interest rate, inflation rate and exchange rate have negative effect on private real investment. The coefficient of determination (R2) proved that the independent variables can explain 62 percent variation on private real investment; the f- statistics found that the model is significant while the Durbin Watson statistics proved the presence of serial autocorrelation.  The effect of macroeconomic variables on private equity investment was presented in model two. The study found that openness of the economy; real gross domestic products, broad money supply, and interest rate have negative and insignificant effect on private equity investment except openness of the economy with significant effect. Inflation rate, financial sector deepening and exchange rate have positive and insignificant effect on private equity investment except financial deepening with significant effect. The R2 proved that the independent variables can predict 66.9 percent variation on private equity investment. The f- statistics found that the model is significant while the Durbin Watson statistics proved the presence of serial autocorrelation. We conclude that macroeconomic variable have significant effect on private investment in Nigeria. We recommend that interest rate must be able to encourage higher private investment by increasing the real interstate on private savings or household savings so that larger amount of income would be saved to accumulate more capital and hence private investment. Policies should be formulated by investors and government to discourage factors that affect negatively private investment.

scholarly journals The Impact of Macroeconomic Variables on Sectoral Indices in Indonesia

ETIKONOMI ◽  
2017 ◽  
Vol 16 (1) ◽  
pp. 71-80 ◽  
Author(s):  
Bambang Sutrisno
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Inflation Rate ◽  
Emerging Market ◽  
Estimation Method ◽  
Least Square ◽  
Series Data ◽  
Macroeconomic Variables ◽  
The Interest Rate ◽  
The Impact

This study aims to examine the effect of macroeconomic variables on sectoral indices in the Indonesian Stock Exchange. The difference in sensitiveness among sectors is an interesting issue to investigate this relationship in an emerging market, such as Indonesia. This study employs ordinary least square (OLS) as an estimation method with monthly time-series data from January 2005 to December 2014. The results document that the interest rate, inflation rate, and exchange rate simultaneously have a significant effect on sectoral indices in Indonesia. The interest rate partially shows a significant negative influence on all sectors except basic industry and chemical, finance, infrastructure, utilities, and transportation, and miscellaneous industry sectors. The inflation rate partially has no significant effect on all sectors. The exchange rate partially has a significant negative impact on all industries.DOI: 10.15408/etk.v16i1.4323

scholarly journals Economic Interactions among Stock Market Performance and Macroeconomic Variables with Mediating Role of Gold Prices Volatilities: An Evidence from Pakistan

2021 ◽  
Vol 7 (3) ◽  
pp. 383-394
Author(s):  
Rukhsana Rasheed ◽  
Mazhar Nadeem Ishaq ◽  
Rabia Anwar ◽  
Mehwish Shahid
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Stock Market ◽  
Inflation Rate ◽  
Market Performance ◽  
Stock Market Index ◽  
Macroeconomic Variables ◽  
Market Index ◽  
Stock Market Performance ◽  
The Impact

In all emerging economies, one of the most challenging issues for investors is the multifaceted inter-relationship between volatility of gold prices and stock market index. During the COVID-19 sub-periods, gold has shown a strong hedging behavior against stock market performance. The main objective of this study was to quantify the long-run relationship among multiple independent macroeconomic variables (predictors) on stock market index (response variable) using the volatilities of gold prices as a mediator factor. This study applied the descriptive statistics, correlation, t-test and OLS multiple regression Model. The specific data comprised of period 2011-2020 regarding the fluctuations in gold prices, exchange rate, interest rate, inflation rate and performance of stock market index has been utilized. The statistical outputs of models showed that exchange rate (Dollar to PKR) was positively affecting the performance of Karachi Stock Exchange (KSE)-100 Index, whereas inflation rate and interest rate were negatively affecting the overall performance of KSE100 index. The findings of this study suggested that to achieve better performance of stock market, relatively low interest rate and inflation rate contribute a significant role. However, to increase the generalization capabilities of this study the impact of mentioned macroeconomic variables in other sectors like industrial production, oil & gas and energy sectors with wider time span can be more helpful.

scholarly journals Effect of Macroeconomic Variables on Stock Market Performance in Nigeria

2019 ◽  
pp. 1-14
Author(s):  
Emmanuel Isaac John
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Stock Market ◽  
Money Supply ◽  
Inflation Rate ◽  
Market Performance ◽  
Test Results ◽  
Macroeconomic Variables ◽  
Stock Market Performance ◽  
Negative Effect

This paper aims at examining the effect of macroeconomic variables on stock market performance in Nigeria using annual time series data spanning 1981 to 2016.The data were obtained from Central Bank of Nigeria (CBN) Statistical Bulletin. Four macroeconomic variables, namely: money supply, interest rate, exchange rate and inflation rate were used as independent variables, while market capitalisation (proxy for stock market performance) was employed as the dependent variable. The results of Augmented Dickey-Fuller (ADF) test revealed that all the variables studied were stationary at first difference except money supply which was stationary at second difference. The Ordinary Least Square (OLS) regression results showed that money supply has a significant positive effect; interest rate has a significant negative effect; whereas, exchange rate has a positive but not significant effect and inflation rate has a positive but not statistically significant effect on stock market performance. The cointegration test results disclosed that there exist a long-run relationship between the macroeconomic indicators and stock market performance. The Granger Causality test results revealed that a unidirectional causality runs from money supply and exchange rate to stock market performance. In conclusion, money supply and interest rate are the true factors influencing stock market performance in Nigeria because they exhibited a significant effect on stock market performance. Whereas, exchange rate and inflation rate indicated a weak (non-significant) effect on stock market performance. Consequently, the recommendations are: monetary policies that favour the supply of money in the economy should be pursued in order to ensure a better performance of the stock market; Interest rate should be relatively low to guarantee a higher performance of the stock market because high interest rate has a significant negative effect on the Nigerian stock market.

scholarly journals Do Macroeconomic Variables Affect Stock Market Performance? A Case Study of DSEX and DS30 Index of Dhaka Stock Exchange

2019 ◽  
Vol 9 (3) ◽  
pp. 182
Author(s):  
Emran Hasan ◽  
Shahanawaz Sharif
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Stock Market ◽  
Inflation Rate ◽  
Market Performance ◽  
Cointegration Analysis ◽  
Causality Test ◽  
Treasury Bill ◽  
Macroeconomic Variables ◽  
Stock Market Performance

Stock market performance– being the linchpin of an economy, requires variations in policies concerning macroeconomic variables. Keeping this in notion, this research assays the empirical association between stock market performance and a few selected macroeconomic variables namely interest rate, exchange rate, inflation rate, and 91-days Treasury bill rate using monthly data ranging from January 2013 to October 2018. Employing Johansen Cointegration analysis, the results of the study suggest that exchange rate and treasury bill rate are positive whereas interest rate and inflation rate are negatively associated with better stock market performance. Granger causality test implies bidirectional causality – between the interest rate and DS30 as well as DSEX while unidirectional causality is evident for both the indices which are running from interest rate, inflation and exchange rate to stock market performance. Formulation and implementation of prudent policies regarding the studied macroeconomic variables can lead to a healthy stock market outcome.

Impact of Macroeconomic Variables on Stock Returns: A Case Study from Karachi Stock Exchange

2021 ◽  
Vol 2 (1) ◽  
pp. 75-86
Author(s):  
HAMZA KHWAJA ◽  
NIDA JAMAL ◽  
SAQIB SHAHZAD
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Stock Returns ◽  
Inflation Rate ◽  
Stock Exchange ◽  
Main Theme ◽  
Macroeconomic Variables ◽  
Multiple Regression Models ◽  
The Impact

The main theme behind this research is to find out how different macroeconomic variables affect the returns of the Karachi stock exchange. The three variables like interest rate, inflation rate and exchange rate which are taken under consideration are the back bone of any economy and this impact the economy in different ways if some sort of fluctuations occurs in these variables. Fifteen years annul data from 1992 to 2007 is taken and multiple regression models applied on this data. The results are very significant and the strong correlation is found among dependent and independent variables which shows that the model is a strong model. The impact of interest rate, exchange rate and inflation rate are significant on the stock returns of KSE 100 index

scholarly journals Impacts of Macroeconomy on Stock Market: Evidence from Pakistan

2014 ◽  
Vol 3 (3) ◽  
pp. 140-146
Author(s):  
Farid Ullah ◽  
Ijaz Hussain ◽  
Abdur Rauf
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Stock Market ◽  
Inflation Rate ◽  
Negative Association ◽  
Macroeconomic Factors ◽  
Monthly Data ◽  
Macroeconomic Variables ◽  
Long Span ◽  
Long Run

Stock market is a place where the securities of listed companies are traded and this can be affected by both macroeconomic and non-macroeconomic factors. The impacts of macroeconomic factors on stock market of Pakistan are investigated in the current study. For this purpose monthly data covering the period from January 2008 to December 2012 is used in this study while taking the three most important macroeconomic variables, Exchange Rate, Interest Rate and Inflation. Using the more advance Bound Testing Approach, a very strong long run cointegration is found amongst the variables taken for the study. In the long span of time, the results suggest that both Exchange Rate and Interest Rate have negative association with stock market of Pakistan while the Inflation Rate does not create such a condition that affect the stock market of Pakistan. Same results are found for the shorter version of time.

scholarly journals Impact of Budget Deficit on Nigeria’s Macroeconomic Variables: 1980-2012

2020 ◽  
pp. 135-150
Author(s):  
Chukwu L.C ◽  
Otiwu K ◽  
Okere P.A. ACIB
Keyword(s):  
Economic Growth ◽  
Exchange Rate ◽  
Real Exchange Rate ◽  
Budget Deficit ◽  
Inflation Rate ◽  
Private Investment ◽  
Rate Effect ◽  
Macroeconomic Variables ◽  
Effect Model ◽  
The Impact

This study investigated the impact of budget deficit on macroeconomic variables of Nigeria, covering the period, 1980-2012.The study was informed by the need to solve the problem of ever-increasing huge budget deficit in the face of weak economic growth and macroeconomic performance. Employing the two stage least square, data analyses were carried out to cover the unit root, granger causality and co integration tests to produce five statistically significant models viz-a viz the budget deficit and economic growth model, the budget deficit and real interest rate effect model, the budget deficit and inflation rate effect model, the budget deficit and investment effect model, and the budget deficit and real exchange rate effect model. It was found out that budget deficits have significant negative relationship with gross domestic product growth rate, real private investment, inflation rate, real exchange rate and positive significant relationship with real interest rates. Thus, the study concludes on the basis of these findings that budget deficit financing has not engendered the required growth in the Nigerian economy and therefore should be reduced.

scholarly journals PENGARUH VARIABEL MAKROEKONOMI TERHADAP PROFITABILITAS BANK KONVENSIONAL BUKU 4 DI INDONESIA

2021 ◽  
Vol 3 (1) ◽  
pp. 65
Author(s):  
Sandi Fitra Yusuf ◽  
Mike Triani
Keyword(s):  
Economic Growth ◽  
Interest Rate ◽  
Random Effect ◽  
Random Effect Model ◽  
Bank Profitability ◽  
Macroeconomic Variables ◽  
Section Data ◽  
Insignificant Effect ◽  
Effect Model ◽  
Selection Test

This study explains the extent of the influence of macroeconomic variables on the profitability of BUKU 4 banks in Indonesia. The macroeconomic variables consist of economic growth (X1), inflation (X2), Bank Indonesia Interest Rate (BI Rate) (X3, and Profitability is measured by the ROA (Return) ratio. On Asset). This study combines cross section data of 7 banks with time series from 2010-2019, with the Panel Regression method with the Random Effect model selection test. The results show that: (1) Economic growth has a positive and significant effect on bank profitability. conventional BUKU 4 in Indonesia, (2) Inflation has a positive and insignificant effect on the profitability of conventional BUKU 4 banks in Indonesia, (3) the Bank Indonesia Interest Rate (BI Rate) has a positive and insignificant effect on the profitability of conventional BUKU 4 banks in Indonesia.

scholarly journals The Analysis of Fundamental Variables and Macro Economic Variables in Predicting Financial Distress

2020 ◽  
Vol 9 (1) ◽  
pp. 81-90
Author(s):  
Siti Nur Kholisoh ◽  
Rina Dwiarti
Keyword(s):  
Exchange Rate ◽  
Interest Rate ◽  
Financial Distress ◽  
Rate Sensitivity ◽  
Total Asset ◽  
Current Ratio ◽  
Return On Equity ◽  
Macroeconomic Variables ◽  
Turnover Ratio ◽  
Asset Turnover

Financial distress is a condition where the company is experiencing financial difficulties prior to bankruptcy. This study aims to identify and explain the influence of the fundamental variables and macroeconomic variables in predicting the probability of financial distress. Based on the eight variables used, current ratio, debt to assets ratio, return on equity and total asset turnover ratio is a fundamental variable. While the sensitivity of inflation, exchange rate sensitivity and interest rate sensitivity included in macroeconomic variables. The population in this study are all porperti and real estate company listed on the Stock Exchange in 2014-2018. The sample selection using purposive sampling technique, acquired 23 companies in the sample with the five companies in the category of financial distress and 18 companies in the category of non financial distress. The analytical method used is logistic regression and sensitivity analysis. The results showed that the variable current ratio, debt to assets ratio, total asset turnover ratio, inflation sesnitivity, exchange rate sensitivity and interest rate sensitivity did not significantly affect the probability of financial distress. While return on equity significantly negative influence on the company’s financial distress.

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