TO GET THE COMPLETE JOURNAL/THESIS FOR TOPIC BELOW,
CALL: 08168759420, 08068231953
WHATSAPP: 08137701720
FORECASTING STOCK PRICE BEHAVIOUR OF SELECTED MANUFACTURING COMPANIES IN NIGERIA: A MARKOV CHAIN APPROACH
ABSTRACT
This study applied Markov Chain to estimate the transition probability, stationary distribution, average recursion time and the rate of turnover of selected manufacturing stocks in the Nigeria Stock Exchange (NSE). The study used a longitudinal research design and employed a systematic sampling technique to select ten (10) firms from the 35 listed on the Nigeria Stock Exchange (NSE) in the manufacturing sector. Daily stock price data were mined from Cashcraft Asset Management Limited from 22nd February 2015 to 28th February 2020. The results showed that five equities in the model I and all equities in model II are of first-order and the Markov chains in both models are ergodic. Also, all equities examined showed a relatively high probability of price stability in the long-run, while Beta Glass Plc is the most stable equity. It is recommended that investors and portfolio managers should pay close attention to the transition and steady probabilities, and the expected average return time to obtain the relevant information that will support their stock trading decisions and strategies.
Keywords: Average Recursion Time, Manufacturing Sector, Markov Chain, Nigeria Stock Exchange, Stock Forecasting.