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Effects of Liquidity Management on the Security Market Performance of Companies Listed at the Nairobi Securities' Exchange.
| Content Provider | Semantic Scholar |
|---|---|
| Author | Rebecca, Anna Oluoch, Oluoch J. Fredrick, Mukoma |
| Copyright Year | 2014 |
| Abstract | In order to evaluate the effects of liquidity management on the security market performance of companies listed at the Nairobi Securities Exchange, this Census study was carried out on the companies that are listed at the NSE over a 72-month period of January 2008 through December 2013. Using the descriptive research design and the Ordinary Least Squares (OLS) model the study revealed that there is a significant difference between the market performance of liquid companies and that of the illiquid companies, with quick ratio as the measure of liquidity management. Further, the study revealed that liquidity management has an effect on the market return/ performance albeit for the illiquid companies. From the study findings, the liquid portfolio excess return is significantly higher than the illiquid portfolio excess return. This could possibly be because the liquid portfolio companies are very risky while the illiquid portfolio companies are less risky as confirmed by the variations in the coefficient of variation. Because of the failure to influence market performance of liquid companies it was observed that the effect of liquidity management on the market performance of companies listed at the NSE increases with the level of illiquidity. Despite this finding, the study also revealed that all the companies that were studied had a quick ratio of above 1, an indication that they tie a lot of their money in liquid assets. It is recommended that the results of this study should be interpreted diligently because the study focused at a short period of only 72 months and a longer period could yield different results. |
| Starting Page | 58 |
| Ending Page | 61 |
| Page Count | 4 |
| File Format | PDF HTM / HTML |
| DOI | 10.9790/4861-06615861 |
| Volume Number | 6 |
| Alternate Webpage(s) | http://www.iosrjournals.org/iosr-jap/papers/Vol6-issue6/Version-1/J06615861.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
