The impact of the 2004 bank capital announcement on the Nigerian stock market

Rufus Ayodeji Olowe (Department of Finance, University of Lagos, Logos, Nigeria)

African Journal of Economic and Management Studies

ISSN: 2040-0705

Publication date: 20 September 2011

Abstract

Purpose

This paper aims to investigate the impact of the introduction of the 2004 bank capital requirements on the quoted stock prices on the Nigerian stock market.

Design/methodology/approach

Using monthly data over the period January 1986 to December 2006, residual analysis methodology was used to investigate stock price reaction to the 2004 bank capital requirements on the Nigerian stock market.

Findings

The results show that the introduction of the 2004 bank capital requirements has a positive impact on quoted securities on the Nigerian stock market. This is reflected in positive abnormal returns from the Nigerian stock market when trading is based on the information from the 2004 bank capital requirements. The results are unaffected by the choice of model. This lends support for the work of Olowe that the Nigerian stock market is inefficient in the semi‐strong form.

Originality/value

This study provides evidence on the stock price reaction to the introduction of the 2004 bank capital requirements on the Nigerian stock market. The result will have implications for the semi‐strong form efficiency of the Nigerian stock market.

Keywords

Citation

Ayodeji Olowe, R. (2011), "The impact of the 2004 bank capital announcement on the Nigerian stock market", African Journal of Economic and Management Studies, Vol. 2 No. 2, pp. 180-201. https://doi.org/10.1108/20400701111176694

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2011, Emerald Group Publishing Limited

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