IMPACT ANALYSIS OF MACROECONOMIC DETERMINANTS AND PERFORMANCE OF STOCK PRICES OF LISTED CONSUMER GOODS FIRMS IN NIGERIA

Abstract

The study examines the impact of macroeconomic determinants on the stock prices of listed consumer goods firms in Nigeria. The specific objectives of the study were to evaluate the effect of interest rate, exchange rate, inflation rate, and economic growth rate on the stock prices of listed consumer goods firms in Nigeria. The study adopted ex-post facto research design which enabled data to be extracted from time series datasets from the annual reports and accounts of ten listed consumer goods firms quoted on the floor of the Nigerian Exchange Group for the period of 7 years, spanning from 2016-2023. The study made use of panel least square (PLS) pooled multiple regression model, fixed effect and random effect regression models to estimate the empirical relationship between components of macroeconomic factors employed in the study and the dependent variable at 0.05 level of significance. The results of the analysis revealed that interest rate and exchange rate had both positive and significant effect whereas inflation rate has a positive and statistically insignificant effect, and economic growth rate has significant positive effect on the stock prices of listed consumer goods firms in Nigeria. The implication of the findings is that macroeconomic variables employed by the sampled consumer goods firms are relevantly in estimating their stock prices. The study concluded that macroeconomic factors (interest rate, exchange rate, economic growth rate, and inflation rate) have mixed effect on the stock prices of listed consumer goods firm in Nigeria for the period under study. The study recommended that Nigerian government through its policy makers should maintain minimal interest rate, make adequate strategic policies for the stability of foreign exchange rate, closely, monitor the inflation rate and strive to achieve sustainable economic growth rate since these will enhance the economic confidence and improve stock prices of listed consumer goods firms under current study.