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Monetary Policy and Share Pricing Business in Nigeria

Author

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  • Adesoye, A. Bolaji
  • Atanda, Akinwande AbdulMaliq

Abstract

The anatomy of Nigerian financial system is composed of the money and capital markets. Monetary policy is a framework used by the apex bank to regulate the flow of loanable funds in the economy, though the pricing of equity used by private investors to raise capital from the economy is carried out at the capital market end of the system. As earlier empirical studies have shown the relationship between monetary policy and stock market, this study provide a precise insight in the mechanism of interaction that co-exist between monetary policy and share pricing in Nigeria. The study identified money supply and interest rate (credit creation) as the main channels through which monetary policy influence sharing pricing in an open economy like Nigeria.

Suggested Citation

  • Adesoye, A. Bolaji & Atanda, Akinwande AbdulMaliq, 2012. "Monetary Policy and Share Pricing Business in Nigeria," MPRA Paper 35846, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:35846
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    File URL: https://mpra.ub.uni-muenchen.de/35846/1/MPRA_paper_35846.pdf
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    More about this item

    Keywords

    Monetary Policy; Share Pricing; Monetary instruments; Money supply; Equity/capital market; money market; financial system; IPO pricing; Nigeria;

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G0 - Financial Economics - - General

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