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| Nigerian Exchange Group Index and the Nigerian Economy: Any Linkages?
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EGUGBO, Rita Uzoma (ACA)
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Abstract:
This paper studied whether the Nigerian Exchange Group-NEG is linked to the growth/performance of the Nigeria. The paper covered from 1987 to 2021 (i.e. 35 years). Specifically, the paper studied the effect of market capitalization-MCAP, volume of shares traded-VST, value of transaction-VTR, All-share-index-ASI, on real gross domestic product-RGDP. Two estimation techniques considered are Ordinary Least Square-OLS and Cointegration Test. The statistical package used to run the regression is Econometric Views version 9.0. The study affirmed that, NEG index on the overall has high predictive power on economic growth. More so, stock market index improved the RGDP of the Nigerian economy. Individually, MCAP and VTR are highly instrumental to economic growth of Nigeria as they had both positive (Coef. of MCAP= 0.637367; Coef. of VTR= 0.847868) and significant (P-Value of MCAP = 0.0206 & P-Value of VTR =0.0459). However, both VST and ASI improved the economic growth (RGDP) of Nigeria minimally. Thus, the paper concludes that, the Nigerian exchange group is instrumental to the Nigerian economy over time. Consequently, the regulators of the exchange group should ensure that trading and settlements activities in the NEG are fully automated.
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