Systematic Risk Factors, Investor Sentiment and Stock Market Performance in Kenya
Musembi, Michael Makau
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The capital market plays a crucial role in the social economic system of a country by providing the necessary revenue required by the public and private sectors. The other important role is maintaining equilibrium in the general financial system by promoting a savings culture thus reducing unemployment and provides alternative sources of capital to reduce reliance on banks for loans. The year ended 2016 was not very good for the Kenyan stock market which was dubbed the worst performing market globally topping Nigeria stock exchange which closed 2015 as the worst performing stock market with investors boycotting the bourse altogether. The last quarter of 2017 saw the equity markets performance of NSE decline further compared to a similar period in 2017 with equity turnover decreasing to KSHS.25.39 billion in 2016 compared to KSH 46.10 billion in 2016.Market capitalization declined by 4.46% to KES 1,961.92 billion in Quarter 4.2016. The study will examine the effect of systematic risk and investor sentiment on share performance of listed firms in NSE Kenya. The study will examine the effect of exchange rate, inflation rate, money supply and investor sentiment on share performance. The moderating role of GDP on the relationship between systematic risk and investor sentiment on share performance will also be evaluated. The target population will be the 67 listed firms in NSE Kenya as at 2017.