dc.description.abstract | As an economic institution, securities market plays a major role of enhancing the
efficiency of capital formation and allocation. Thus the overall development of the
economy is a function of how well the securities market performs. This study was
therefore based on the view of stock market dynamics as the interactions among macroeconomic
variables with respect to Gross Domestic Product Growth Rate and Interest
Rate Variations. The study objective was set out to determine the impact of GDP growth
rate, Interest rates variations on Nairobi Securities Exchange Performance. The study
therefore attempted to explore how the Kenyan securities markets were impacted on by
GDP growth rate and Interest rate variations. The study was based on the efficient market
hypothesis as postulated by Fama (1970) which asserts that an efficient market is capable
of quickly digesting new information on the economy, an industry, or the value of an
enterprise and accurately reflect it in securities prices. The study was designed to
undertake explanatory study which was longitudinal in the quest to answer the research
questions. The subjects or cases analyzed were the same or at least comparable from one
period to the next, the analysis involved some comparison of data between or among
periods. Longitudinal research was justifiable for this study as same macroeconomic
variables were observed and analyzed using quarterly time series data covering the
January 2003 to December 2014. The target population consisted of all listed companies
at NSE from which NSE 20 share index was derived. Secondary data was used in the
study the NSE share index was collected from Nairobi stock exchange. While data on
GDP growth rate was obtained from Kenya bureau of statistics, data on interest rates was
obtained from Central Bank of Kenya. The study concludes that a positive correlation
exists between GDP and Nairobi securities exchange share performance .Therefore GDP
significantly affected the performance of NSE. The study also concludes low positive
correlation between interest rates and share performance, hence Interest rate variations
did not significantly influence the NSE share performance. | en_US |