Browsing by Author "Maina, Susan Nyambura"

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    Macro-Economic Variables and Performance of Corporate Bonds at the Nairobi Securities Exchange, Kenya
    (Kenyatta University, 2019-05) Maina, Susan Nyambura
    Corporate bond recorded a poor performance at the Nairobi Securities exchange (NSE) despite its role in funding companies and in spite of its huge potential as a sustainable source of investment. The primary role of a developed also functioning market for bond is provision of cheaper, long-term finance for funding capital investments. Growth of bond markets is critical to the financial and economic systems of a nation. There is a dearth of studies on performance of corporate bonds in NSE, though the attention is growing. Investors have demonstrated a growing interest in bonds to a point that some of the bonds have been oversubscribed. The study purpose was to examine influence of macro-economic variables on corporate bonds performance at NSE duration spanning from 2001-2015. The study was anchored on efficient market hypothesis theory, trade off theory and arbitrage pricing theory. The study target population was every of the 16 firms quoted at the NSE that had issued corporate bonds in that period. A quantitative research design was adopted for the study using the longitudinal approach. Secondary data was collected form the NSE by means of a data collection form. Analysis of the secondary data was through descriptive procedures assisted by SPSS Version 21 software. Multiple linear regression analysis and Pearson correlation was conducted to ascertain impact of each of the predictor variables on the response variable. Data was presented using graphical, pictorial representation, tables as well as percentages to demonstrate how macro-economic variables influence performance of corporate bonds. Pearson correlation analysis results demonstrated an inverse relationship between three macro-economic variables; exchange rates, interest rates and inflation rates with performance of corporate bonds. The analysis for multiple linear regression results demonstrated that exchange rates, inflation rates, and commercial banks rates of interest have negative effect on performance of corporate bonds. Government expenditure had a significant positive association on performance of corporate bonds. Government spending showed a positive association to performance of corporate bonds. Recommendations were made for the government to strengthen its regulatory framework, majorly through monetary policy, to keep the macro-economic factors under check to reduce detrimental effects on performance of corporate bonds.
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    Macro-Economic Variables and Performance of Corporate Bonds at the Nairobi Securities Exchange, Kenya.
    (International Academic Journals, 2018) Maina, Susan Nyambura; Kimutai, Gladys
    This study sought to determine the Macro economic variables and performance of corporate bonds at the Nairobi Securities Exchange in Kenya. The study was guided by four specific objectives which were to determine the effect of inflation, interest rate, exchange rate and government expenditure on the performance of corporate bonds at the NSE in Kenya. The study was guided by Efficient Market Hypothesis Theory, Trade off Theory and Arbitrage Pricing Theory. The study adopted a quantitative research design that is a longitudinal survey approach. The study was done by means of a census approach. The study focused on all the companies quoted in the Nairobi Securities Exchange that had issued corporate bonds in a fifteen years period (2001 to 2015). Secondary data was collected by means of a data collection form. Analysis of the secondary data was through descriptive procedures assisted by SPSS Version 21 software. Moreover, a Pearson correlation multiple linear regression analysis were conducted to establish the influence of each of the predictor variables on the response variable. Data was presented using graphical, pictorial representation, tables as well as percentages to show the degree of influence of macro-economic variables on the performance of corporate bonds. From the study, the Coefficient of Determination, R Square indicated that 58.60% of the variation in performance of corporate bonds was influenced by variation in macro-economic variables namely government expenditure, exchange rate, inflation and interest rate. To that effect, only 41.40% of the variation in performance of corporate bonds was unexplained by the factors that were included in the model. Multiple linear regression analysis findings demonstrated that inflation rates, exchange rates and commercial banks interest rates have a negative effect on performance of corporate bonds. Government expenditure, the regression output revealed, had a significant positive influence on performance of corporate bonds. Pearson correlation analysis results demonstrated an inverse relationship between three macroeconomic variables; exchange rates, interest rates and inflation rates with performance of corporate bonds. Government spending showed a positive association with performance of corporate bonds. Recommendations were made for the government to strengthen its regulatory framework, majorly through monetary policy, to keep the macro-economic factors under check to reduce detrimental effects on performance of corporate bonds.