| dc.description.abstract | This study presents a picture of the behaviour of share
prices in the Nairobi Stock Exchange, Kenya. Besides exposing the
nature and character of the exchange,the study shows the status
of the exchange among the world stock markets along with its current
state of arts.
Chapter 1 briefly gives the perspective and/or background of
the study; chapter 11 outlines share price behaviour hypotheses,
theoretical background and prior research work.Chapter 111
describes the research methodology and the data employed. The empirical
results are discussed in chapter 1V, and chapter V contains
the conclusions.
The study is an empirical examination of the behav1cur of
ordinary share prices in the Nairobi Stock exchange (NSE); of ten
selected "blue chip " companies. The behavior investigated is
weekly bid price change over five years from January , 1986 t.o
December, 1990. The bid price successive changes are hypothesized
to be random.
Using autocorrelation and runs test, the empirica1 results
tend to confirm this hypothesis. Specifically, the author found
that weekly bid price changes are independent of one another and
over time the change, in price is random. Unfortunate to the investor,
there were no reported patterns in share price movements.
The results throw light on a number of interesting questions.
First, they demonstrate that in the NSE past price information
is immediately impounded in current prices.
Second, they provide evidence that investors in the NSE Cannot
make any meaningful prediction concerning future prices, and
therefore no abnormal profits can be reaped in the exchange.
Finally and interestingly, the results are consistent with the
notion of efficient market hypothesis and that the NSE is an efficient
market: more specifically. in the weak-form level. | en |
