Abstract:
The study sought to investigate the effect of interest rate, inflation, gross domestic
product, gold price, crude oil price, cocoa price and covid-19 pandemic on the stock
market returns of the Ghana stock exchange. The study used causal research design,
quantitative technique. Annual data from 1998 to 2021 was used. Data analysis
techniques employed were VAR model, Toda & Yamamoto, Johansen cointegration,
ADF and PP unit root test. Findings revealed that the hypothesised macroeconomic
variables interest rate, inflation rate and gross domestic product do not granger cause
stock market return. Contrary to conventional findings, the study observed no
causality between gold prices, crude oil prices, cocoa price and stock market returns
of the Ghana stock exchange. However, covid-19 pandemic was found to granger
cause stock market returns of the Ghana stock exchange. The study found no bi nor
uni-directional relationship among the independent variables when used as dependent
variables. The findings have the following practical implications; the government
should focus more attention on other aspect of the financial system such as the
banking industry that respond quickly to variations in these variables. Again, the
findings implies that effort and actions by government to minimize shocks posed by
volatility in the price of analysed commodities should be shifted toward other
commodities that Ghana trades-in. The novelty of the study is the test of probable
causality between Covid-19 and stock market movement as the first of its kind in the
study’s jurisdiction.
Description:
A Dissertation in the Department of Applied Finance and Policy
Management, School of Business, submitted to the School of
Graduate Studies, in partial fulfilment of the
requirements for award of the degree of
Master of Business Administration
(Finance)
in the University of Education, Winneba