Effects of oil price change on capital stocks of selected companies in agro-allied industry in Nigeria

摘要

This study was carried out to determine the effect of oil price changes on capital stocks of agro-allied companies in Nigeria. Secondary data obtained from Nigerian Stock Exchange, Centre Bank of Nigeria and Energy Information Administration was used. Panel data estimation technique was employed in analysing the data. The panel data set up comprises of seven quoted agro-allied companies in the floor of Nigerian Stock Exchange over the period of 120 months (1997.1-2006.12). The result showed a significant positive relationship between oil price change and stock prices. This implies that oil price is a relevant factor in determining stock prices in oil producing and exporting countries like Nigeria. It is also revealed that inflation and interest rate on bank deposit exert a negative impact on stocks. Exchange rate has a positive significant relationship with capital stock. Based on the findings, it is recommended that the Federal Government of Nigeria should formulate and implement policies that will control the economic variables in favour of the stock market.