Impact of Crude Oil Shrinkage on Stock Market Returns in Nigeria
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This study investigated impact of Crude Oil shrinkage (COS) on stock market returns (SMRs) in Nigeria. The study spanned for a period of twenty-one years (2000-2020). The SMRs which was proxy by market capitalization while COS which was proxy with CO price, inflation rate, balance of trade and exchange rate. The specific objectives are: the connection between the CO price and SMRs in Nigeria; the connection between Nigeria's SMRs and inflation rate; the co-existence between the balance of trade and SMRs and the link in Nigeria between the exchange rate and SMRs. The data was sourced from CBN Statistical Bulletin 2020. The study employed time-series data. OLS multiple regression estimation technique was used, normality test, serial correlation test, and Heteroskedasticity test with the aid of E-views 9.0 statistical software. The results revealed that; CO price has a P-value 0.002<0.05; inflation rate has a P-value of 0.000<0.05; balance of trade has a P-value of 0.04<0.05 while exchange rate has a p-value of 0.000<0.05. Considering that all of the independent variables' p-values are significant, are less than 5% significant level, the study concluded that COS has a crucial and positive effect on SMRs in Nigeria. The report proposed that the Nigerian government judiciously use oil revenue to favourably impact the economy, to adapt SMRs shakes it won't hurt the economy so harshly because the resources were used properly when it was thriving.
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