Investors perceptives on the NASI and the NSE 20 share index as performance measurement indicators at the Nairobi securities exchange in Kenya
Jagongo, A. O.
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The NSE 20 share index has been victim of criticism from majority of investors and investment analysts due to its inherent shortcomings that make it a weak performance measurement indicator. As a result, the NSE introduced the NASI in February 2008 as a complimentary index. The purpose of this paper to compare the two indices and find out whether any significant difference exists between the two indices. This was an empirical study and both primary and secondary data was used. Historical data on the daily performance of the NSE market for the two years period (March 2008-February 2010) was obtained from the NSE information centre. The data collected was used to test the hypothesis of no difference between the two indices at5% level of significance using the Z test. Correlation analysis was also carried out to determine if significant correlation exists between the two indices with stock prices and market capitalization. Primary data was obtained using a questionnaire administered on 17 markets analysts with one analysts being drawn from each of the 17 NSE member firms. The findings of the study indicate that there is no significant difference between the two indices