Contributions of Pension Industry Investments to Nigerian Capital Market

Okparaka, V. C.; Okechukwu, S. T.

Contributions of Pension Industry Investments to Nigerian Capital Market

Authors: Okparaka, Vincent Chukwuka, Okechukwu, Stanley Tobechukwu

Journal: International Journal of Advanced Finance and Accounting (IJAFA), ISSN 2765-8457

Citation: IJAFA 2(4): 1-9, 2021-08-03.

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Type: Original Research

Abstract

This study was on contribution of pension industry investments to the Nigerian capital market. The specific objectives were to evaluate the contributions of pension industry investment in corporate bonds to total market capitalization of the Nigerian Stock Exchange; and to investigate the contributions of pension industry investment in quoted ordinary shares to total market capitalization of the Nigerian Stock Exchange. The period of the study was from 2007 to 2020. Data was sourced from Pension Commission of Nigeria industry reports and Central Bank of Nigeria Statistical Bulletin. Autoregressive Distributed Lag Model (ARDL) was used to analyze data. It was found that pension industry investments in corporate bonds did not contribute significantly to total markets capitalization of the Nigerian Stock Exchange. Also, it was found that pension industry investment in quoted ordinary shares did not contribute significantly to total market capitalization of the Nigerian Stock Exchange. Based on the findings of the study it was concluded that only pension industry investments in short term financial instruments do not have significant contribution to capital market development in Nigeria. In line with the findings of the study it was recommended that the industry should aid the private sector to expand its ventures in real estate. Furthermore, the pension industry should spread its investment in quoted ordinary shares among high yield companies.

Keywords

Pension Industry Investments, Nigerian Capital Market, Total Market Capitalization

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