EFFECT OF SHORT SELLİNG ON RİSK AND RETURN İN THE NİGERİAN STOCK MARKET
The study looked at the effect of short selling on risk and return in the Nigerian stock market. Purposive sampling was employed throughout the study period 2005 to 2020 to determine the sample size for the stocks of 113 companies' stock. The monthly stock prices, market index, risk-free rate,...
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| Format: | Article |
| Language: | English |
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Technopress
2022-12-01
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| Series: | Journal of Public Administration, Finance and Law |
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| Online Access: | https://www.jopafl.com/uploads/issue26/EFFECT_OF_SHORT_SELLING_ON_RISK_AND_RETURN_IN_THE_NIGERIAN_STOCK_MARKET.pdf |
| _version_ | 1797814305465303040 |
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| author | Abraham Oketooyin GBADEBO Yusuf Olatunji OYEDEKO |
| author_facet | Abraham Oketooyin GBADEBO Yusuf Olatunji OYEDEKO |
| author_sort | Abraham Oketooyin GBADEBO |
| collection | DOAJ |
| description | The study looked at the effect of short selling on risk and return in the Nigerian stock market. Purposive sampling was employed throughout the study period 2005 to 2020 to determine the sample size for the stocks of 113 companies' stock. The monthly stock prices, market index, risk-free rate, ownership shareholdings, market capitalization, book value of equity, earnings before interest and taxes, and total assets were the data used in this study. The sub-sample period, 2005–2008, 2009–2012, 2013–2016, and 2017–2020, were covered by the study. The data was extracted from the Nigerian Group of Exchange (NGX) website, the Central Bank of Nigeria (CBN) website, and the Standard and Poor (S&P) database. The Fama-MacBeth two-step regression method was employed. It was found that the short selling strategy has a negative and insignificant effect on returns in the Nigerian stock market. On the other hand, it has been documented that short selling has a negative but significant effect on risk in the Nigerian stock market. The study concluded that short-selling strategies could be used as investment strategies that could promote efficiency if properly monitored and regulated in the Nigerian stock market. If not, they could lead to price pressure and volatility in the Nigerian stock market. The study recommended that a well-regulated short selling investment strategy promotes stock market efficiency through an increased liquidity and minimized volatility in the Nigerian stock market. |
| first_indexed | 2024-03-13T08:05:41Z |
| format | Article |
| id | doaj.art-db43ef11ac8a4c178dd9118d325abbbb |
| institution | Directory Open Access Journal |
| issn | 2285-2204 2285-3499 |
| language | English |
| last_indexed | 2024-03-13T08:05:41Z |
| publishDate | 2022-12-01 |
| publisher | Technopress |
| record_format | Article |
| series | Journal of Public Administration, Finance and Law |
| spelling | doaj.art-db43ef11ac8a4c178dd9118d325abbbb2023-06-01T06:50:58ZengTechnopressJournal of Public Administration, Finance and Law2285-22042285-34992022-12-01112699114https://doi.org/10.47743/jopafl-2022-26-10EFFECT OF SHORT SELLİNG ON RİSK AND RETURN İN THE NİGERİAN STOCK MARKETAbraham Oketooyin GBADEBO0Yusuf Olatunji OYEDEKO1Department of Banking and Finance, Osun State University, OsogboDepartment of Finance, Federal University Oye-Ekiti, EkitiThe study looked at the effect of short selling on risk and return in the Nigerian stock market. Purposive sampling was employed throughout the study period 2005 to 2020 to determine the sample size for the stocks of 113 companies' stock. The monthly stock prices, market index, risk-free rate, ownership shareholdings, market capitalization, book value of equity, earnings before interest and taxes, and total assets were the data used in this study. The sub-sample period, 2005–2008, 2009–2012, 2013–2016, and 2017–2020, were covered by the study. The data was extracted from the Nigerian Group of Exchange (NGX) website, the Central Bank of Nigeria (CBN) website, and the Standard and Poor (S&P) database. The Fama-MacBeth two-step regression method was employed. It was found that the short selling strategy has a negative and insignificant effect on returns in the Nigerian stock market. On the other hand, it has been documented that short selling has a negative but significant effect on risk in the Nigerian stock market. The study concluded that short-selling strategies could be used as investment strategies that could promote efficiency if properly monitored and regulated in the Nigerian stock market. If not, they could lead to price pressure and volatility in the Nigerian stock market. The study recommended that a well-regulated short selling investment strategy promotes stock market efficiency through an increased liquidity and minimized volatility in the Nigerian stock market.https://www.jopafl.com/uploads/issue26/EFFECT_OF_SHORT_SELLING_ON_RISK_AND_RETURN_IN_THE_NIGERIAN_STOCK_MARKET.pdfshort sellingreturnriskfama-macbeth two-step regressionnigerian stock market |
| spellingShingle | Abraham Oketooyin GBADEBO Yusuf Olatunji OYEDEKO EFFECT OF SHORT SELLİNG ON RİSK AND RETURN İN THE NİGERİAN STOCK MARKET Journal of Public Administration, Finance and Law short selling return risk fama-macbeth two-step regression nigerian stock market |
| title | EFFECT OF SHORT SELLİNG ON RİSK AND RETURN İN THE NİGERİAN STOCK MARKET |
| title_full | EFFECT OF SHORT SELLİNG ON RİSK AND RETURN İN THE NİGERİAN STOCK MARKET |
| title_fullStr | EFFECT OF SHORT SELLİNG ON RİSK AND RETURN İN THE NİGERİAN STOCK MARKET |
| title_full_unstemmed | EFFECT OF SHORT SELLİNG ON RİSK AND RETURN İN THE NİGERİAN STOCK MARKET |
| title_short | EFFECT OF SHORT SELLİNG ON RİSK AND RETURN İN THE NİGERİAN STOCK MARKET |
| title_sort | effect of short selling on risk and return in the nigerian stock market |
| topic | short selling return risk fama-macbeth two-step regression nigerian stock market |
| url | https://www.jopafl.com/uploads/issue26/EFFECT_OF_SHORT_SELLING_ON_RISK_AND_RETURN_IN_THE_NIGERIAN_STOCK_MARKET.pdf |
| work_keys_str_mv | AT abrahamoketooyingbadebo effectofshortsellingonriskandreturninthenigerianstockmarket AT yusufolatunjioyedeko effectofshortsellingonriskandreturninthenigerianstockmarket |