Suchergebnisse

Herding is an important factor in determining equity returns during periods of price fluctuations in the market. Increased herding behaviour among investors as a result of uncertainty causes unnecessary volatility. Therefore, this paper investigates whether herding behaviour contributes to stock market volatility at the Nairobi Securities Exchanges (NSE). First, the study evaluates whether herding behaviour exists at the NSE and the extent of such behaviour. Secondly, it explores its attributed implication on the stock market indicators demonstrating volatility. The study has utilized monthly data from firms listed in the NSE from January 2009 to December 2015. Cross Sectional Standard Deviation (CSSD) has been mainly employed as testing methodology. Panel data on individual variables was used to estimate the non- linear model of both binary and continuous nature. Coefficients by the model have statistical significant influence on CSSD confirming the presence of significant herding patterns at the NSE which influence volatility as demonstrated in the graphical analysis and consequently firm performance. In order to have proper market stability which is appealing to retail and corporate investors, the findings suggest that stock market players including the government should critically consider providing both private and public information on retail and institutional investors. The government need to stabilize market prices to retain public confidence through provision of timely and accurate information of stock markets. Continuous herding behaviour by investors may spur unnecessary volatility which is likely to destabilise the market and increase the fragility of financial system especially in developing economies.

Improving fiscal performance by reducing budget deficits has for long been at the heart of many governments in developing countries. Budget deficit in all cases whether monetized or not, tends to generate inflationary pressures triggering uncertain crisis in an economic system. Majority of the developing nations, Kenya inclusive have had a dismal performance by attracting negative budget balances over the years. To contain fiscal vulnerabilities, there is need to understand factors behind fiscal performance in Kenya. The objectives of this study are to establish the trends and extent to which these factors determine fiscal performance in Kenya. The study employed unrestricted Vector Autoregressive (VAR) model in estimating how macro-economic, political and institutional factors affect fiscal balance using longitudinal data collected, consolidated and analysed for the period 1963 to 2013. In the short run, both the first and the second lags of fiscal balance, Treasury bill, Tax revenue and inflation significantly influenced fiscal balance. On the other hand, only the first lags of real gross domestic product per capita growth rate, the first differences of the Total Debt service and the Gross Government Investment affected fiscal balance significantly whereas only the second lags of the first differences of both the current account and the ratio of broad money to GDP were found to significantly determine fiscal balance. The study suggests therefore that the government should intervene through refocusing on the existing fiscal policies to mitigate the anticipated future problems likely to be associated with the existence of unchecked behaviors of these determinants. Finally, the government and the relevant agencies need to consider adjusting Treasury bill rates downwards to increase fiscal balance. As well, the government should be able to encourage internal investment by the local and encourage internal borrowing at affordable interest rates. This may ultimately spur economic growth through varied sectors of the ...