Effect of Inflationary Trends on Capital Market Performance of Fast-Moving Consumer Goods Companies in Nigeria

Abstract

This study investigates the effect of inflationary trends on capital market performance of fast moving consumer goods in Nigeria within the data set of 2010-2020. The guiding objectives of the study are (i) to ascertain the effect of consumer price index on market value/capitalization in fast moving consumer goods companies in Nigeria. (ii) to ascertain the effect of interest rate on capital market value in fast moving consumer goods companies in Nigeria. The study adopts the Expost Facto research design and the Ordinary Least Square (OLS) Estimation Technique in analyzing times series data on market share, consumer price index and interest rate for a period of 12 years generated from the Central Bank of Nigeria statistical bulletin and the researcher’s computations. The findings of the study this study reveals that consumer price index has a positive and significant relationship with the market share, this implies that an increase in the units of consumer price index will lead to a significant increase in the market share in the period analysed. More so, the study reveals that interest rate have negative and significant relationships with market share, which implies that an increase in the units of interest rate will lead to decrease in the market share in the period analysed. The researcher recommends that government should make necessary and informed trade policies capable of attracting more investors into the country that will bring down the level of consumer price index. This would go a long way in enhancing the Nigerian economy.