January Effect on Stock Returns at the Nairobi Securities Exchange Nairobi, Kenya
Kiprono, Eric K
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Although an efficient market can lead to abnormal stock returns, presence of January effect can influence the investors’ returns. In Kenya, January Effect on stock returns has been revealed by studies a lot of the studies are focsed on the differences between returns on variouse time of the year. Out of the local and global studies reviewed very few comprehensively concentrated on the on the effect of January effect on returne on stock at NSE between 2011 to 2015, thus a research gap. Therefore the study was undertaken to explain whether January effect is persistent in this market and affects stock returns. Knowledge of the market seasonality is of great importance to investors since such knowledge would signal the right time to buy or sell stocks. It is important for the investors to know the seasonality of the stock market for them to take the advantage. It is against this status of affairs that the present was carried out to fill the existing knowledge gap in an effort to providing adequate knowledge to investors that would signal the right time to buy or sell stocks during this seasonality at the NSF. Thus the purpose of this study was to examine the January effect on stock return the different sectors in the NSF hence confirming the persistent effect of January on returns on stock at the NSE. The study used descriptive design and had the 65 companies listed at the NSF as at 31st December 2015 as the target population. The research is pegged on data from secondary sources including those of Nairobi Stock Exchange, NASI indices collected from the Kenya’s bourse. This study used the monthly all share index data for the Nairobi Securities Exchange (NSE). The portfolio performance for this study was evaluated using the Shame’s ratio. The Chi-squared (Z2) test was used to assess if there is any statistically significant differences between the actual (observed) mean returns and hypothesized (expected) mean returns of the portfolios.
university of nairobi
SubjectJanuary Effect on Stock Returns
RightsAttribution-NonCommercial-NoDerivs 3.0 United States
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