African Journal of
Business Management

  • Abbreviation: Afr. J. Bus. Manage.
  • Language: English
  • ISSN: 1993-8233
  • DOI: 10.5897/AJBM
  • Start Year: 2007
  • Published Articles: 4137

Full Length Research Paper

The role of market liquidity, information efficiency on stock market performance: Empirical evidence from Uganda stock exchange

Rogers Mwesigwa
  • Rogers Mwesigwa
  • Department of Business Administration, Makerere University, Business School, Uganda.
  • Google Scholar
Sulait Tumwine
  • Sulait Tumwine
  • Faculty of Vocational and Distance Education, Makerere University Business School, Uganda.
  • Google Scholar
Edson R. Atwine
  • Edson R. Atwine
  • Faculty of Vocational and Distance Education, Makerere University Business School, Uganda.
  • Google Scholar


  •  Accepted: 04 October 2013
  •  Published: 07 October 2013

Abstract

The purpose of this study is to examine the role of Market Liquidity, Information Efficiency on Stock Market Performance in Uganda. The research design adopted was cross-sectional and quantitative. Data were collected from 66 respondents from a sample of 80 investors, brokers and staff of Uganda stock exchange. We performed a Pearson correlation and multiple regressions in the analysis of data. The study posts a positive relationship between Market Liquidity, Information Efficiency and Stock Market Performance in Uganda and explains 62.3% of the variance in stock market performance in Uganda. Study was cross-sectional, which measures the intention only at a single point in time hence may suffer from cross-sectional’s attendant limitations. It contributes to dearth of existing literature on stock market performance - largely focuses on Market Liquidity, Information Efficiency separately using Uganda’s experience. The study recommends the necessity for the Uganda stock exchange to create awareness on the importance of security market in Uganda. As our model explains only 62.3% of the variance in stock market performance in Uganda is concerned, future research should be directed at establishing other factors that could explain the remaining 37.7%

Key words: Market liquidity, information efficiency, stock market performance, Uganda.