Trends of Share Pricing In the Nigerian Stock Market

Abstract

With the rapid development of the capital market in Nigeria, in recent years, coupled with the role it plays in the sphere of national growth and development, there is need for investors to put more attention to shares being traded on the stock market and how these prices tend to move over the years. This research paper tends to examine the roles, functions, rules and regulations of the capital market in share pricing. The research paper also identifies the factors and the various theories that are responsible in the changes of share prices over time. In this research paper, a specified model is used. Also, statistical and economic tools are used to show extent of the positive relationship that exist between share prices and exchange rate. The paper examines the market capitalization effects on share prices, while a negative relationship exist between share prices and inflation. The research paper which is centered on trends of share prices in Nigeria Stock market between 1988-2011 showed that market capitalization (MCAP) and exchange rate (EXRT) are very good determinants of share prices movement, while inflation (INFL) is not.

Key Words: Across the board; Bear; Bull; Dividend; Bond: Equity; Offer for sales; Share; Stock Market; Underwriting.