Welfare Economics of IPOs: The Deal that Never was, in Kenya
Ojwang’ George Omondi*
Department of Business Studies, Siaya Institute of Technology, Kenya
- Corresponding Author:
- Ojwang’ George Omondi
Department of Business Studies
Siaya Institute of Technology, Kenya
E-mail: [email protected]
Received Date: April 19, 2016; Accepted Date: May 03, 2016; Published Date: May 05, 2016
Citation: Omondi OG (2016) Welfare Economics of IPO’s: The Deal that Never was, in Kenya. Int J Econ Manag Sci 5:340. doi:10.4172/2162-6359.1000340
Copyright: © 2016 Omondi OG. This is an open-access article distributed under the terms of the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
This study sought to determine the economic factors predicting IPO share price volatility at the Nairobi Securities Exchange under the mediating role of regulatory authorities such as the Central Bank of Kenya, Capital Markets Authority, Nairobi Securities Exchange and National Treasury, and the intervening function of Investment banks, commercial banks, brokerage houses, media and politics. Through a correlational research design employing simple regression, the results are contradictory on the economic indicators and their effect on different sectors of the economy. With the exception of Equity bank which showed a positive relationship with interest rates, Foreign exchange, Nairobi Securities All Share Index and Lagged Share Price, KenGen and Safaricom showed no significant relationship with their economic predictors. A reworked model comprising inflation rate, interest rate, foreign exchange rate and money supply captured the overall market prediction with the initial three having negative significance whereas money supply had positive significance as a predictor of share price volatility.