The Effects of Macroeconomic Variables on Stock Market Performance in the Nairobi Securities Exchange

Abstract

Stock market execution is measured by stock showcase file which may be marker of the course of share cost development. It may be a speedy degree for judging the generally heading of the market and is considered to be an exact pointer of changes within the stocks market. The think about looked for to look at the impacts of macroeconomic factors on stock showcase execution at NSE measured by the share costs. The selected macroeconomic variables were Inflation Rate, Gross Domestic Product, Interest Rates and USD Foreign Exchange Rate. This consider utilized quarterly information on a time series of 2007 to December 2017. The subordinate variable utilized in this think about was NSE 20 share file utilized as an intermediary for the share cost. Information utilized in this ponder was auxiliary and was collected from different sources I.e. Data on Swelling rate and Intrigued rate were gotten from the Central Bank of Kenya reports, net household item, USD trade rate was gotten from Kenya National Bureau of Measurements, and NSE 20 share record was gotten both from Nairobi securities Trade websites and KNBS. This study used multiple regression analysis to analyze data in SPSS software. The results from the analysis expressed a variation of 55.8% in the share prices which was explained by the four macroeconomic variables. This meant that the difference variation of 44.2% in the share price was brought about by other macroeconomic elements which were to taken into consideration by the study. The study concluded that GDP and Intrigued Rate had a wonderful impact on share prices, FER and IR had a terrible impact on share cost and hence an influence on inventory market performance. The study concluded that the chosen macroeconomic elements represented a moderate response on share prices listed at the NSE. Finally Inflation rate had the highest negative unit of -51.807 in share prices.