Relationship between Stock Market returns, Capital Formation and Private investment in Nigeria for the period of1981 to 2018:- Igwe Cynthia G

ABSTRACT

The study investigates the stock market returns, capital formation and private investment in Nigeria with annual time series data covering the period of 1985-2017. The OLS (Ordinary Least Square) method and multiple regression model econometric approach were adopted for this research work. This studyfound that there is a significant positive relationship between stock market returns and private investment in Nigeria. The study also found that a significant and positive relationship exists between market capitalization and private investment, but a significant and negative relationship exists between minimum rediscount rate and private investment, while there is a negative relationship between broad money supply and private investment. The study also found that there exists a positive relationship between grossfixed capital formation and private investment. The study recommends that there is need for the government through the central bank to implement policy that will increase the level and size of market capitalization in the capital market. Such increase in market capital will provide the needed funds for local investors for further investments and hence increased productivity in Nigeria.