Artikel

Do presidential elections affect stock market returns in Nigeria

Evidences thrive on the effects of political regimes and presidential elections on stock market returns. This paper investigates the effects of presidential elections on stock returns around the election periods at the Nigerian Stock Exchange (NSE) market. A sample of five (5) months each for a total of six (6) presidential elections held between 1999 and 2019 was employed. Returns were calculated using daily closing prices of NSE's all share index (ASI). Afterwards, the regime heteroskedastic Markov switching model was found fit for the data. Empirical results typify the daily stock returns in terms of bear (low) and bull (high) regimes. Bear regime (1) leads across the 6 election horizons with lower volatility while the bull regime (2) records higher volatility in addition to more positive returns. Specifically, presidential election impacts positively on stock returns only during the 2011 election. Besides, findings show that stock market returns during presidential elections when the PDP government was in office were bearish whereas the market returns were bullish for elections held when the APC government was in office. To achieve stability in the market and the economy at large, restraints on the side of fiscal authority and setting limits on election/campaign spending could help in forestalling upheavals in the market around presidential elections in Nigeria.

Language
Englisch

Bibliographic citation
Journal: West African Journal of Monetary and Economic Integration ; ISSN: 0855-594X ; Volume: 19 ; Year: 2019 ; Issue: 1 ; Pages: 52-73 ; Accra: West African Monetary Institute (WAMI)

Classification
Wirtschaft
Single Equation Models; Single Variables: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
Asset Pricing; Trading Volume; Bond Interest Rates
Financial Forecasting and Simulation
Capitalist Systems: Political Economy
Subject
Presidential election
stock market returns
Markov regime switching model
dummyvariable

Event
Geistige Schöpfung
(who)
Aliyu, Shehu U. R.
Event
Veröffentlichung
(who)
West African Monetary Institute (WAMI)
(where)
Accra
(when)
2019

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.

Object type

  • Artikel

Associated

  • Aliyu, Shehu U. R.
  • West African Monetary Institute (WAMI)

Time of origin

  • 2019

Other Objects (12)