Abstract: Globally, share price volatility is the unavoidable market phenomenon that reflects on fundamentals of finance, information in the market and investor expectations. Share price volatility disturbs the proper operations of the financial system and negatively affects stock market performance. High volatility above a mark raises the investment’s risk profile hence possibility of losses is paramount. This study assessed the effects of stock price volatility on stock market performance companies listed on the Rwanda Stock exchange. The study was guided by the following specific objectives; to determine the effect of exchange rate on the stock market performance of firms listed in Rwanda Stock, to determine the effect of interest rate on the stock market performance of firms listed in Rwanda Stock, to determine the effect of inflation rate on the stock market performance of firms listed on Rwanda Stock exchange. The study adopted descriptive research design and the population contained all the eight companies listed in the Rwanda Stock Exchange (RSE). A census survey was conducted on all the eight listed firms and purposive sampling technique was used to sample the respondents to participate in the study. Data was analyzed using descriptive statistics, correlation analysis and regression analysis using SPSS version 21. Correlation and regression methods used to carry out the inferential analysis. Statistical t-test and F- test was used to test the significance of explanatory variables on dependent variable. The study found that Exchange rate had a positive influence on the stock market performance in Agricultural, Industrial allied sectors and a negative influence on Finance and investment sectors and commercial and services sectors. Inflation had a positive influence on the stock market performance in investment sector and a negative influence on all the other sectors. Interest rate had a positive influence on the stock market performance in Commercial, sectors and a negative influence on Investment sectors. The study also found that fuel prices had a negative influence on the stock market performance in the Automobile sectors while having a positive influence on the stock market performance in all the other sectors. The findings showed that the type of sector characteristics had a moderating effect on the relationship between macroeconomic variables of exchange rate, Interest rate, Inflation, and the stock market performance at the RSE.
Keywords: Exchnge rate, Share price volatility, Rwanda stock exchange.
Title: EFFECTS OF SHARE PRICE VOLATILITY ON STOCK MARKET PERFORMANCE OF COMPANIES LISTED ON RWANDA STOCK EXCHANGE IN RWANDA
Author: MAURICE BAHANDWA NSHUTI, Dr. PATRICK MULYUNGI
International Journal of Management and Commerce Innovations
ISSN 2348-7585 (Online)
Research Publish Journals
