An Exploratory Investigation of Foreign Portfolio Investment in Money Market Instruments and the Nigerian Stock Market Performance
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Date
2019
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Publisher
The Internatinal Journal of Business & Management
Abstract
This paper investigated whether foreign portfolio investment in money market instruments have an influence on the
performance of the Nigerian stock market. The study employed ex-postfacto research method using monthly time series
data for 11 years between 2007 and 2017. The Autoregressive Distributed Lag (ARDL) model was used to specify the
influence of foreign portfolio investment in money market instruments on stock market performance. The results of the
analysis revealed a significant and positive relationship between foreign portfolio investment in money market
instruments and the performance of the Nigerian stock market (t-stat= 2.6110; P= 0.0258<0.05; R2 = 0.77). The study
concluded that foreign portfolio investment in money market instruments had significantly predicted stock market
performance in Nigeria. Hence, the study recommended that policies formulated towards a more developed stock market
should consider importance the influence of foreign portfolio investments in the market