What have we learnt from modelling stock returns in Nigeria: Higgledy-piggledy?

Stock market though simply trades in long term investible resources but it means so many things to lots of people. Accountants inching more closely, analyze determinants of stock valuation and dividend policies while business administrators venture into matters pertaining to corporate governance structure, its ambiance with corporate performance and existence. Mathematicians circumnavigating in the abstract planet develop complex models to crack it and unwittingly, make life miserable for mathematically-averse economists. Stockbrokers, although not well versed in the mechanics of finance, fatten on novice investors’ fortunes. Economists, from a safe distance, model it and chart course for investors and regulators. Regulators; Securities and Exchange Commission (SEC) and the Nigerian Stock Exchange (NSE) among others in Nigeria, set a level playing ground and sparsely, like electrical engineers, employ circuit breakers to dampen upheavals that could throw the market overboard.. Solicitors inventively nurture litigations and fruitage on the investors’ windfall. Extreme risk-seekers stand between thin and delicate line of extreme affluence/wealth and suicide. Risk averse folks, however, abhor it. In its self, capital market serves as a buffer zone for fund-starved business entities and governments, a haven for not-so-holy funds and a barometer of segregation of firms into listed, unlisted and delisted entities. Its trading options; the call and put options, provide insurance or protection to buyers and sellers against changes in the price of an underlying asset, respectively. Among other indicators, it is a gauge for adjudging the health of an economy. The market is bullish when the economy is booming and becomes bearish when it is sliding. It, though less often, counterintuitively, moves in opposite direction with economic performance. Notwithstanding, it is vulnerable to policy misadventures; monetary, fiscal, exchange rate, trade policies and responds to domestic conditions of monumental proportions; elections, recession, insecurity, corruption and oil price dynamics–albeit an external factor. Further, it is responsive to major global predicaments; the 2007 US’s mortgage crisis, the 2014/15 oil price slowdown, Covid-19 and therefore, susceptible to monsoonal, spillover, comovement and contagion effects.