Macroeconomic Variables and Stock Market Performance in the Nairobi Securities Exchange, Kenya

Authors : Ngele Marcs Kilonzo; Dr. Fredick Ndede

Volume/Issue : Volume 8 - 2023, Issue 9 - September

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The NSE20 Share Index, reliably used as the benchmark index during the period 2013–2021, appeared to have an unswerving decay, demonstrating a falling- apart market performance within the Kenyan securities exchange. This decline raised concerns among various stakeholders. As a result, the study investigated how macroeconomic factors influence stock market performance at the Nairobi Securities Exchange in Kenya. The research was conducted from January 2013 to December 2021 using an exploratory research design and employed the cointegration analysis method to analyze the data. The target population was 27 annual average macroeconomic variable performances for selected variables. Secondary data information was collected from the Central Bank of Kenya, the Kenya National Bureau of Statistics and the Nairobi Securities Exchange. The findings uncovered a measurably critical affiliation between the exchange rate and stock market performance, where an increment within the exchange rate drives a diminish in stock market performance by - 0.11 units. Consequently, an increment in the Treasury bill rate would lead to an increment in stock market performance of 0.139 units, and Treasury bills have shown a factually critical affiliation with the stock market performance. The study prescribed that the government reinforce surveillance on the regulatory framework to strengthen its monetary and fiscal policies and screen macroeconomic variables. Furthermore, it suggested further research on the topic, exploring the use of macroeconomic variables to mitigate the adverse effects they have on stock market performance.

Keywords : stock market performance, market index, macroeconomic variables,


Paper Submission Last Date
31 - December - 2023

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