Determinants of stock price during dividend announcements: evaluation of firm's variable effects in Nigeria's oil and gas sector

摘要

The aim of this research is to analyse quantitative variables, statistically significant, that determines the share price of the oil and gas sector companies listed on the Nigerian stock Exchange, during economy slowdown interval of 2009-2013, after world financial crisis of 2008, as well as investigating if signalling hypothesis holds or not. In terms of analytical tools, multiple regression analysis is used. During dividend increase announcement, the regression coefficient determinant (R~2) indicates that over 90 per cent of variation in stock prices are explained by variation in the dividend announcement. This study supports the dividend signalling hypothesis (DSH) but discredits the efficient market hypothesis (EMH). During dividend decrease, the R2 for both equations indicates that over 64 per cent of variation in stock prices is explained by variation in dividend Announcement. This result supports also the DSH. The implication of this is that, if racketeers are aware, they can capitalise on it making unjustified returns. By so doing, both the sector investors and the stock market will be short changed. As this is a research considering only the oil and gas sector, further studies need to be conducted considering possibly all the listed firms, within the same interval, in the Nigerian stock market to investigate further if the signalling hypothesis will hold or not. But most appropriate, being a comparative study before the world financial crisis of 2008 and after, in the same sector among the OPEC member states, to find out if this phenomenon is also applicable. This research is in progress. This paper differs from previous studies in that it attempts not only to examine the impacts of firm variables, but also to investigate the signalling hypothesis in the oil and gas sector during dividend announcement periods within economy slowdown interval of 2009-2013.