IIARD International Institute of Academic Research and Development

Journal of Accounting and Financial Management (JAFM )

E-ISSN 2504-8856
P-ISSN 2695-2211
VOL. 10 NO. 9 2024
DOI: 10.56201/jafm.v10.no9.2024.pg299.314

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Stock Market Liquidity and Stock Market Performance in Nigeria

Andabai, Priye Werigbelegha, Ph.D

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Abstract

This study explored the implication of stock market liquidity on stock market performance in Nigeria covering from 1993-2023. The study applied ex-post facto design and used secondary data subjected ordinary least model. The descriptive statistic applied for the study shows that all the series are normally distributed. The ordinary least square model was used for the analysis. Findings reveal that there is a favourable and substantial implication of stock market liquidity value traded ratio on all share index in Nigeria. However, there is also a positive significant impact of turnover ratio on all share index in Nigeria. The r2 suggest about 82% of the variations in stock market outcome in Nigeria can be explain by changes in stock market liquidity variables. The study concludes that market liquidity significantly affect stock performance in Nigeria. Henceforth, the scholarly investigation proposes that in order to enhance and maintain the magnitude of the stock market liquidity variable in Nigeria, thereby exerting a greater influence on the performance of the stock market sector in Nigeria, it is vital to facilitate the accessibility of a wider array of investment instruments, including derivatives, convertibles, futures, swaps, and options, within the market. This will effectively augment the rate of turnover. Consequently, this phenomenon will engender a surge in the demand for the services rendered by the stock market, thereby fostering an augmented level of market liquidity. The commission should formulate policies that encourage firms to increase their post-tax profits and dividends, as these variables have been empirically demonstrated to have robust significance in influencing the fluctuations of the company's performance and the market's value.

keywords:

Stock, Market, Liquidity, Performance, Nigeria

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