The impact of Information Communication Technology on stock returns and trading volumes for companies quoted at the Nairobi Stock Exchange
This study sought to investigate the impact of ICT on the stock returns and trading volume in Nairobi Stock Exchange. The specific objectives of the study included to examine impact of information technology on stock returns at Nairobi Stock Exchange and to investigate effects of information technology on trading volume at Nairobi Stock Exchange. This study used descriptive design to achieve these objectives. A census survey for all the companies quoted at the NSE was done for the period 2005-2010. This study used secondary data obtained from NSE, company website and financial statements. Stock trading volumes was used to test the impact ofICT. The study determined prices effects of IPO announcement by testing the statistical difference of the mean daily return of the event period (observation period with the mean daily return of the comparison period. The comparison period for this study comprised of 45 surrounding days before the event study and 45 surrounding days after the IPO window. Descriptive statistics such as mean, standard deviation and percentages were used for analysis. The results of the findings were presented in charts, figures and tables. The study found that that the market was very sensitive to various change that were as result of adoption of ICT at NSE, the daily mean return had a mean of 0.12 and standard deviation of 0.212, this was also seen in the case of trade volume where trade volume had a mean of 0.053 and standard deviation of 0.06. Mean return and trade volumes fluctuation were very low before adoption of ICT nearing the event day they were slightly greater fluctuation in the value of trade volumes and mean daily return, mean daily return was seen to be lagging behind the trade volumes. Two days prior to the adoption of ICT there was slightly greater fluctuation in both mean daily return and trade volumes. On the event day trade volumes realized a greater fluctuation compared to mean daily return. It is evident therefore that the adoption of ICT by NSE increasded the mean daily return and trade volume. This study recommends that more studies should be done in the area of factors affecting stock returns and trading volume for companies quoted in Nairobi Stock Exchange.