FINANCIAL LIQUIDITIES AND AFRICAN STOCK MARKETS
FINANCIAL LIQUIDITIES AND AFRICAN STOCK MARKETS
Author(s): Monday Uhunmwangho, Sunday Osaretin IgbinosaSubject(s): Financial Markets, Socio-Economic Research
Published by: Universitatea SPIRU HARET - Faculty of Accounting and Financial Management
Keywords: African Stock Markets; Diaspora Remittances; Financial Liquidities; Generalised Method of Moments;
Summary/Abstract: Financial liquidity can be used as a tool by investors and regulatory authorities to influence investment activities at the exchange. The objective of this study was to determine the categories of financial liquidity that affect stock market returns in Africa. Sixteen (16) African countries were investigated for the period 2013 to 2019. The Generalised Method of Moments (GMM) in first difference transformation was engaged for the analysis. Our findings revealed that financial liquidity significantly determine stock market returns in Africa. Specifically, stock market liquidity and global liquidity (diaspora remittances) significantly and negatively impact market returns, while economy-wide liquidity positively and significantly affect returns. Therefore, policy should be directed at mobilizing diaspora remittances because doing so will stimulate investment spirit and boost trading activities at the exchange. Also, market regulatory authorities in emerging economies should introduce more transparent trading platform and derivative instruments to improve stock market liquidity which have the capacity to enhance stock market performance.
Journal: Journal of Academic Research in Economics (JARE)
- Issue Year: 14/2022
- Issue No: 1
- Page Range: 95-108
- Page Count: 14
- Language: English
- Content File-PDF