Title:
THE EFFECT OF MACROECONOMIC VARIABLES ON CAPITAL MARKET PERFORMANCE: A CASE OF GHANA STOCK EXCHANGE

Authors:
David Mensah Awadzie and David Kwashie Garr ,Ghana

Abstract:
The stock market is a monetary establishment that advances the development and improvement of the economy of a country. The purpose of the study is to investigate the effect of Macroeconomic variables on the stock market performance in Ghana. The study focused on the impact of the foreign exchange rate, interest rate and inflation rate fluctuation on the market performance of the Ghana Stock Exchange. The study used secondary quarter-time series data for thirty years from 1990 to 2019. The unit root test was employed utilizing the Augmented Dickey-Fuller (ADF) test to assess the stationarity in the data. The regression analysis was employed to evaluate the influence of the macroeconomy variables on the stock market performance, market capitalization was used to measure stock market performance. The results indicate that inflation and exchange rate have a positive effect on capital market performance, while interest rate exerts a negative impact on capital market performance. It implies that an increase in both the inflation rate and exchange rate would enhance capital market performance while an increase in interest rate would reduce the capital market performance