Measuring Daily Stock Market Returns using Market Capitalization Ratio in Nigeria

  • John Okey Onoh Abia State University, Uturu
  • Fredrick Chizoba Ibekwe Institute of Ecumenical Education, Thinker's Corner, Enugu
  • Uloma Adonye Onoh Michael Okpara University of Agriculture Umudike
  • Best Ugonna Egbo Godfrey Okoye University, Enugu


Adequate knowledge about the performance and efficiency of stock returns remains vital and essential to investors. The ability to generate confidence among investors requires an understanding of the role market capitalization plays in the growth of daily returns of the Nigerian Stock Market. The study adopted the ex-post facto research design and data were obtained from daily reports of the Nigerian Stock Exchange from 2nd January, 2001 to 31st December, 2015. The study used the Ordinary Least Square (OLS) in hypotheses testing. The results revealed that the market capitalization value ratio has a positive and significant effect on stock returns (MCVr coefficient = 0.867, p = 0.00 < 0.05, t-value = 22.9). Apparently with F-statistic = 11271 the model is well fitted for the research, the goodness of fit of the model was further justified by 85.9% of the observations of the stock returns explained by the market capitalization ratio. Thus, the study recommends creation of new policies that will encourage increases in the profit after tax and dividends of quoted firms; this supports previous studies establishing statistically significant relationships between the value of capitalization and company performance on one hand and market performance on the other.


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How to Cite
ONOH, John Okey et al. Measuring Daily Stock Market Returns using Market Capitalization Ratio in Nigeria. GOUNI Journal of Management and Social Sciences, [S.l.], v. 4, n. 2, p. 188-203, feb. 2017. ISSN 2550-7265. Available at: <>. Date accessed: 10 may 2018.


Market Capitalization Ratio; Stock Returns; Nigerian Stock Exchange; All Share Index