Equity Investment and Financial Performance of Listed Investment Firms in Kenya
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Date
2024
Journal Title
Journal ISSN
Volume Title
Publisher
Stratford Peer Reviewed Journals and Book Publishing
Abstract
The maximization of an organization benefit is vital and remains the critical goal of any
institution in business. Investment decision making in most corporate institutions is regarded
as a financial underlying decision executed by top management in the financial sector which
include financing decisions and dividends decisions. Making a decision on why to invest on
various financial securities is a fundamental goal to the financial performance of an investment
firms. Large organizations are faced with portfolio investment problem; this is because there
are so many investment projects to be invested on. Nearly all the listed investment firms in
Kenya have registered declining profitability in the last five years. The aim of the study was to
assess how equity investment affected financial performance of listed investment firms in
Kenya. Modern portfolio theory anchored this investigation and was supported by expected
utility theory, liquidity preference theory and active portfolio management theory. Explanatory
research design provided basis for this research. The study focused on all five listed investment
firms in Kenya. The study employed census since investment firms in Kenya are few and can
be studied in the entirety. Informed by the availability of already published information, this
study obtained data from secondary sources where it covered a period from 2011 to 2021. Since
the study targeted various firms in different periods then panel analysis was considered the
most appropriate mode data analysis that was borrowed. This mode of analysis enabled the
study to test the relationship of study variables as envisaged by the study goal. Finding of the
study found out that equity investment positively and significantly affected profitability of
listed investment firms in Kenya. Based on the results it can be concluded that equity portfolio
investment is an essential predictor of financial performance. The study recommends the usage
of the finding as benchmark by regulators in improving investment of portfolio selection in the
capital market
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Citation
Kimoropm A. J., Jagongo A. O. & Waweru F., W. (2024). Equity Investment and Financial Performance of Listed Investment Firms in Kenya. Journal of Finance and Accounting