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Presidential Election and Portfolio Selections in the Nigeria Stock Exchange

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  • Ifuero Osad Osamwonyi
  • Osazee G. Omorokunwa

Abstract

This study seeks to investigate the effect of presidential elections on investors¡¯ portfolio selection in Nigeria from 2003 to 2011. The regression analysis was used to identify the effects that election could have on stock prices in the country, while event study was applied to investigate the focused effects of election event on portfolio selection in the Nigerian stock exchange. Price index for high and medium capitalization stocks were used in the analysis. The study showed that there were low returns performance in the stock market during elections and that elections events have strong (generally) negative effects on abnormal returns for the selected companies in the Nigerian Stock Exchange. In addition, the study showed a negative relationship between the return and risk behaviour of selected companies and election announcement in Nigeria. It is recommended that government and relevant authorities should increase the surveillance of both the market and political system prior to the presidential election in order to curtail the instability during this period.

Suggested Citation

  • Ifuero Osad Osamwonyi & Osazee G. Omorokunwa, 2017. "Presidential Election and Portfolio Selections in the Nigeria Stock Exchange," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 8(4), pages 184-195, October.
    • Handle: RePEc:jfr:ijfr11:v:8:y:2017:i:4:p:184-195
    DOI: 10.5430/ijfr.v8n4p184
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    References listed on IDEAS

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    Cited by:

    1. Aliyu, Shehu Usman Rano, 2020. "What have we learnt from modelling stock returns in Nigeria: Higgledy-piggledy?," MPRA Paper 110382, University Library of Munich, Germany, revised 06 Jun 2021.

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