Determining the Accuracy of The Nairobi Stock Exchange 20-Share Index
Otieno, Odhiambo Luther
Jaafar, Syaiful Baharee
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The study sought to establish whether there were no significant differences in the performance measurements among market indicators in the Stock Exchange and also compared the stock index with an alternative index. The study location was at the Nairobi Stock Exchange where the sample consisted of all companies whose ordinary shares were quoted at the time of the study. Secondary data was collected consisting of the share prices, volume and value of shares traded, and number of shares in issue, number of transactions and the market capitalization. The NSE 20- Share index, being a geometric index was found to be independent of the base date but consistently understated price rises and overstated price falls during the period under study. The Fisher‟s Ideal method of stock index construction was found to be the most representative, consistent, bias- free and accurate measure of value movements and market performance of the Nairobi Stock Exchange.
- School of Business