Currency Devaluation Announcement and Share Prices Of Deposit Money Banks in Nigeria
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TABLE OF CONTENTS
Title page……………
Declaration……. i
Dedication……. ii
Certification ……. iii
Acknowledgement ………. v
Table of Contents …………. vii
List of Tables……….. ix
List of Appendices………… x
Abstract……………… xi
1.0 INTRODUCTION
1.1 Background to the Study — 1
1.2 Statement of the Problem ——- 5
1.3 Research Questions —– 6
1.4 Objectives of the Study —- 6
1.5 Statement of Hypotheses ———- 7
1.6 Significance of the Study —–7
1.7 Scope of the Study ——- 8
1.8 Limitations of the study ——– 9
2.0 LITERATURE REVIEW
2.1 Introduction — 10
2.2 Concept of Currency Devaluation — 10
2.3 Concept of Share Prices Reaction —— 12
2.4 Determinants of Share Prices Reactions ——– 13
2.5 Review of Empirical Studies —– 21
2.5.1 Currency Devaluation Announcement and Share Prices —- 21
2.6 Theoretical Framework ——–31
3.0 RESEARCH METHODOLOGY
3.1 Introduction ———-33
3.2 Research Design ——- 33
3.3 Population and Sampling of the Study – 33
3.4 Sources and Method of Data Collection — 35
3.5 Method of Data Analysis ———- 36
4.0 DATA PRESENTATION AND ANALYSIS
4.1 Introduction — 44
4.2 Data Presentation —– 43
4.3 Data Analysis ————— 44
4.4 Discussion of Findings ————- 59
4.5 Policy Implication of the Study ———- 61
4.6 Theoretical Implication of the Study —————- 61
5.0 SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
5.1 Summary —– 62
5.2 Conclusions ——- 62
5.4 Recommendations —— 63
5.5 Suggestions for Further Study —- 63
REFERENCES —————– 65
APPENDICES ———— 70
INTRODUCTION
In all economies, banks are the principal players in financial market for the intermediation of funds from the surplus economic units to the deficit units for productive and investment purposes and as such, the relevance of Deposit Money Banks (DMBs) in the Nigerian financial system cannot be over emphasized.
Taylor (1998) posited that globally, a number of nations had at one time or another devalued their currencies. The main motive for devaluation in most of these countries is that fixed exchange rate was upheld by these nations over a period of time which eventually became unsustainable.
Theoretical evidence suggests that fixed exchange rates reduce exchange rate risk as far as the exchange rate remains fixed.
Thus, if the supply of a country‟s currency surpasses the demand for the currency, the currency will be forced to decline in value. Also, if a country imports more goods than it exports, there will bepressure on the currency to devalue.
However, if the deficit in trade is counterbalance by capital inflows into the country for investment purposes, the country can maintain the trade deficit without being forced to devalue.
Though, if the capital inflows are no more obtainable, the available option for the country to avoid devaluation is by buying or supporting its own currency in the market through its currency reserves in order to augment the meagre capital inflow, but once currency reserves run out then devaluation becomes unavoidable (Taylor, 1998).
REFERENCES
Abdulrahman, A., Mohammadsidek, N.Z.,& Tafri, F.H.(2009). Macroeconomic Determinants of Malaysian Stock Market.African Journal of Business Management, 3 (3), 095-106
Adelegan, O. J. (2009). Pice Reactions to Dividend Announcements on the Nigerian Stock Markets.AERC Research Paper No. 188
Adler, M. & Dumas, B. (1984). Exposure to Currency risk: Definition and Measurement, Financial Management 12, 41–50.
Aduda, J., Mansila, J.M.,& Onsongo, E.N. (2014).The Determinants of Stock Market Development: The Case for the Nairobi Stock Exchange.International Journal of Humanities and Social Science, 2(9), 214-230
Afego,P. (2011). Stock Price Response to Earnings Announcements: Evidence from the Nigerian Stock Market. MPRA Paper No. 33931.
Agung, I. G. N. (2009).Time Series Data Analysis using Eviews.Singapore: John Wiley & Sons Limited.
AL- Shubiri, F.N. (2010). Analysis of the Determinants of Market Stock Price Movements:An Empirical Study of Jordanian Commercial Banks. International Journal of Business and Management, 5(10), 137-147
Almumani, M.A (2014). Determinants of Equity Share Prices of the Listed Banks in Amman Stock Exchange: Quantitative Approach. International Journal of Business and Social Science, 5(1), 91-104
