Stock Market Response To Presidential Election Result Announcement In Nigeria
Keywords:
Nigerian Stock market; Abnormal return; Presidential elections; Event study; Market efficiency.Abstract
This study investigates how the prices of stocks listed on the Nigerian Stock Exchange responded to Presidential elections result announcement. The daily All Shares Index was used as proxy for stock prices while the 2015 and 2019 Presidential elections result announcement were used as proxy for new information. The Researcher adopted the event study methodology and a 21-day event window was constructed. That is 10 days before presidential elections result announcement (-10) and 10 days after the announcement (+10) in addition to the event day. The average abnormal returns (AAR) and the cumulative average abnormal returns (CAARs) were computed and analyzed using the t-statistic to ascertain whether it is possible to earn abnormal return due presidential results pronouncement. The findings revealed that stock prices respond quickly to new information thereby making it difficult to earn abnormal return due to the 2015 and 2019 presidential elections results announcement.References
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